Retrenchments rise, but unemployment remains low in a cooling labour market
In 2023, retrenchments in Singapore more than doubled, reaching 14,320, a sharp increase from the previous year’s 6,440. However, retrenchments in the fourth quarter saw a decrease compared to the previous quarter. The main cause of job cuts was business reorganisation or restructuring, notably in sectors like wholesale trade, IT services, and electronics manufacturing. Despite the rise in retrenchments, the majority of retrenched workers typically re-entered the job market within six months, often transitioning to different industries, indicating a transferable skillset.
While retrenchments grew, overall employment expanded by 89,400 for the year, a slowdown compared to 2022’s surge of 227,800 post-pandemic. Non-residents accounted for most of this growth, particularly in the construction sector. Meanwhile, resident employment saw growth in sectors like health, social services, public administration, and education.
Despite these shifts, the unemployment rate in Singapore remained stable and low, improving to 1.9% from 2.1% in 2022. The resident unemployment rate dropped from 2.9% to 2.7%, and citizen unemployment decreased from 3% to 2.9%. This shows a relatively tight labour market, even amidst the rise in retrenchments and slowing employment growth.
Looking ahead to 2024, there are positive signs, with businesses indicating higher hiring intentions and wage increases. However, economic uncertainties and the potential for further restructuring and retrenchments remain as risks. The labour market is expected to moderate, with weaker hiring and fewer job vacancies in the coming months.
