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Singapore sees record low layoffs since at least 1998; 7 in 10 retrenched workers employed within 6 months

SINGAPORE — Despite headline-grabbing layoff exercises by tech companies, the total number of retrenchments in 2022 was at a record low, while the proportion of retrenched workers who found new work quickly reached its highest levels since 2015.

There were 6,440 retrenchments in 2022, according to the Ministry of Manpower’s (MOM) latest labour market report on Wednesday (March 15).
There were 6,440 retrenchments in 2022, according to the Ministry of Manpower’s (MOM) latest labour market report on Wednesday (March 15).
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  • There were 6,440 retrenchments in 2022, the lowest on record
  • More than 73 per cent of laid-off workers found work within six months in the fourth quarter of the year, the highest quarterly figure since the second quarter of 2015
  • Total employment for the whole of 2022 saw a record-high increase of 227,800
  • Labour and employment experts said that high-profile retrenchment exercises over recent months were largely limited to one sector and a "small blip" in the wider labour market

SINGAPORE — Despite headline-grabbing layoff exercises by tech companies, the total number of retrenchments in 2022 was at a record low, while the proportion of retrenched workers who found new work quickly reached its highest levels since 2015.

There were 6,440 retrenchments in 2022, fewer than the 10,690 retrenchments recorded in the pre-pandemic year of 2019 and the 8,020 retrenchments in 2021, according to the Ministry of Manpower’s (MOM) latest labour market report on Wednesday (March 15).

This meant that the full-year retrenchment numbers for 2022 was at the lowest point since MOM began to collect its current series of retrenchment data in 1998. Accordingly, retrenchment per 1,000 also dipped to its lowest since 1998 to 3.1.

Separately, the percentage of retrenched residents who found work within six months after getting laid off increased to 73.1 per cent in the fourth quarter of the year, the highest since the second quarter of 2015.

Experts who spoke to TODAY said that high-profile retrenchment exercises were largely limited to the tech sector. They added that the tight labour market may have contributed to the quick return of laid-off employees to the workforce.

Total employment for the year also saw a record-high increase, which meant that the number of people employed had surpassed pre-pandemic levels.

WHY IT MATTERS

Major laying off exercises that grabbed headlines, particularly in technology companies, drove up retrenchment numbers in the third quarter of 2022 to 1,120, following a record low of 830 in the previous quarter

MOM at the time said that business reorganisation or restructuring remained the top reason for layoffs. 

This prompted concerned Members of Parliament to file questions on the sector late last year.

The following are the key labour market numbers:

RESIDENT EMPLOYMENT

  • Total employment for the whole of 2022 saw a record-high increase of 227,800
  • This brings total employment numbers to 3,625,100, 2.9 per cent above the 2019 level
  • Resident employment grew by 26,300, mostly in outward-oriented sectors such as financial services and information and communications
  • By December, resident employment numbers have surpassed 2019’s by 4.8 per cent

NON-RESIDENT EMPLOYMENT

  • Non-resident employment (201,600) contributed to the bulk of the increase in total employment
  • This was primarily due to the hiring of Work Permit holders in sectors such as construction and manufacturing, as companies backfilled positions after the relaxation of border controls
  • However, non-resident employment has reached only 99.2 per cent of pre-pandemic numbers

UNEMPLOYMENT RATE

  • Overall annual average unemployment rates dropped to 2.1 per cent from 2.7 the year before, reaching below pre-pandemic levels
  • Resident long-term unemployment rate also improved to 0.6 per cent, lower than the pre-pandemic average of 0.7 per cent

RETRENCHMENT

  • Retrenchment numbers increased in the last two quarters of 2022
  • The numbers doubled in the final quarter at 2,990, from 1,300 registered in the third quarter
  • Despite this, total retrenchments for the year was lower than pre-pandemic levels. The total retrenchments was 10,730 for 2018 and 10,690 for 2019 
  • The top reasons for retrenchment in 2022 were business reorganisation or restructuring, MOM said

VACANCIES

  • Number of job vacancies, though still elevated at 104,500, continued to decline for the third consecutive quarter in December 2022
  • The ratio of job vacancies to unemployed persons increased to 2.33 in December as the number of unemployed persons also declined
  • A significant proportion of vacancies was in typically foreign worker-reliant sectors such as manufacturing and construction

OUTLOOK FOR 2023

“Global economic headwinds and slower growth may weigh on labour demand going forward, although hiring sentiments in December 2022 remain positive,” MOM said in its statement.

This is in the midst of persisting uncertainties in the global economy.

Domestically, aviation and tourism-related sectors are expected to benefit from the recovery in air travel and inbound tourism.

However, outward-oriented sectors such as manufacturing are seeing dimmer growth outlook.

Overall, the ministry expects the growth in the labour market to be uneven across sectors and “likely to ease from 2022’s increase”.

TECH RETRENCHMENTS ‘A SMALL BLIP’ IN BIGGER PICTURE

Labour economist Walter Theseira said that the discrepancy between high-profile retrenchment exercises and the relatively low number of layoffs here can be attributed to the disproportionate media coverage of the former.

Layoffs at high-profile tech companies tend to get more publicity than those at some unknown firm given “their high market value, the high pay of their staff”, the associate professor from Singapore University of Social Sciences said.

The uneven attention “(causes) us to think that there are huge upheavals in the labour market, whereas in the background, the overall pace of layoffs has in fact been very low,” he told TODAY.

Veteran human resource practitioner Adrian Tan said that when tech companies cut costs, their suppliers might also be affected, though the overall impact is still contained, he said.

“In the grand scheme of things — and with the fact that things are reopening — it is just a small blip in this entire bigger situation,” he told TODAY.

Both of them attributed the high re-entry rate for retrenched workers to the ongoing manpower shortage.

Manpower Minister Tan See Leng said in Parliament last November that most who were laid off from these tech companies were in non-tech roles.

“It is really not hard for at least the corporate service people being affected to move from (company) A to B. Say you are laid off by a tech company as a marketing person. You can take the same marketing skill set and join a traditional business,” said Mr Adrian Tan.

On avoiding the trap of long-term unemployment, Assoc Prof Theseira and Mr Adrian Tan said that it boils down to fundamentals such as seeking career counselling or coaching, tapping one's network and being open to retraining.

However, both acknowledged that it can be challenging to follow through with these steps.

For example, Mr Tan said for the older generation of workers, they might feel “paiseh (embarrassed), no face, if people know I’m retrenched”.

“But I've seen so many instances when you just put up on LinkedIn that, ‘Hey, I'm affected by the latest XYZ round (of layoffs)’, you can see the outpouring of support,” he added.

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labour market manpower retrenchment

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