MOM report reveals 14,320 retrenched in 2023, more than double previous year
Singapore witnessed a significant surge in retrenchments in 2023, more than doubling from the previous year to reach 14,320, as reported in MOM's Labour Market Advance Release Fourth Quarter 2023.
SINGAPORE: Retrenchments in Singapore for the year 2023 more than doubled compared to the previous year.
The number of retrenchments rose to 14,320, up from 6,440 in the preceding year, according to Labour Market Advance Release Fourth Quarter 2023 released by the Manpower Ministry (MOM) on Wednesday (31 January).
In the fourth quarter, the number of people laid off (3,200) was lower than in the third quarter (4,110), driven by a decrease in retrenchments within the wholesale trade sector.
MOM attributed the surge in retrenchments in 2023 to business reorganization or restructuring, partly due to the impact of global economic headwinds on outward-oriented sectors like wholesale trade, IT services, and electronics manufacturing.
MOM stated that statistics on re-entry into the workforce after retrenchment indicate that most retrenched workers typically find new employment within six months, often transitioning into different sectors, highlighting the transferability of their skill.
In the final quarter of the year, total employment, excluding migrant domestic workers, increased by 8,400, marking the ninth consecutive quarter of growth.
MOM observed a significant moderation in the growth of total employment for both residents and non-residents, a trend aligned with weaker hiring expectations and declining job vacancies signalling a cooling labour demand.
MOM noted that this moderation was anticipated due to subdued hiring expectations and decreasing job vacancies in previous quarters. Resident employment growth primarily occurred in domestic-oriented services like health and social services, public administration, and education.
Retail trade and food and beverage services also experienced employment boosts, mainly due to seasonal hiring.
Moderate full-year total employment growth in 2023
Despite a robust post-pandemic rebound in 2022, the full-year total employment growth in 2023 was more moderate, decreasing from 227,800 to 89,400 amidst weaker economic conditions.
According to the MOM report, employment growth in 2023 was mainly from non-residents, led by the Construction sector, with the continued demand for private and public sector projects.
"Resident employment growth was spread across sectors. It was driven by Health & Social Services and Public Administration & Education (within Community, Social & Personal Services), as well as outward-oriented sectors such as Financial and Professional Services."
MOM defended Singapore's low unemployment rate
Unemployment rates remained unchanged at 2 per cent overall in December 2023.
Throughout 2023, the unemployment situation remained stable and low amid a tight labour market, with rates at 1.9% overall, 2.7% for residents, and 2.9% for citizens, according to MOM.
MOM defended that Singapore’s unemployment rate is also one of the lowest compared to other developed countries such as the Netherlands, Germany, and South Korea.
2024 outlook: Caution amid global economic risks
Looking ahead to 2024, the Manpower Ministry expressed optimism, citing improved business expectations from their surveys and the Ministry of Trade and Industry's anticipation of enhanced economic growth prospects.
Forward-looking indicators also suggested potential improvements in employment and wage growth, with an increasing proportion of firms expressing intentions to hire or raise wages in the next three months, according to MOM.
However, the report cautioned that lingering downside risks in the global economy might lead to business reorganization or restructuring, potentially resulting in further retrenchment.
Consequently, unemployment rates could experience a slight increase, said MOM.
"The Government strongly encourages employers and workers to make full use of available programmes to remain competitive and resilient amidst economic uncertainty. "
"Employers should press on with business transformation and equip their workers for expanded or redesigned job roles. Workers are encouraged to continue to upskill and be open to new opportunities, " MOM advised.
MOM added that the Labour Market Report for the Fourth Quarter of 2023, scheduled for release in mid-March 2024, will offer an in-depth analysis of the labour market, encompassing detailed insights into 4Q 2023 and the entire year.
The report will present a comprehensive breakdown of resident and non-resident employment, sectoral statistics, job vacancies, labour turnover, and the re-entry rates of retrenched residents.
