Singapore retrenchments hit highest level in over five years in Q2, even as employment grows

SINGAPORE: Retrenchments in Singapore climbed to their highest level in more than five years in the second quarter of 2026, even as the labour market continued to expand and employment grew for a 19th consecutive quarter.Advance labour market figures released by the Ministry of Manpower (MOM) on Friday (Jul 31) showed 4,500 workers were retrenched in Q2, up from 3,830 in the preceding quarter. It was the highest quarterly figure since Q4 2020, when there were 5,640 retrenchments.This also lifted the incidence of retrenchment to 1.9 per 1,000 employees from 1.6."The increase was concentrated in some outward-oriented sectors, driven primarily by business restructuring," said MOM. In June, MOM said that an ongoing restructuring in professional and knowledge-intensive sectors drove a notable shift in layoffs among degree holders in Q1, with the incidence of retrenchment rising sharply for this group.The ministry then noted the incidence of retrenchment rose among older workers aged 50 to 59 - from 2.8 to 3.1 per 1,000 resident employees.But MOM said on Friday that Q2 retrenchment levels remained well below those typically seen during periods of downturn. It cited quarterly retrenchment figures ranging from 5,980 to 12,760 and 5,640 to 9,120 during the 2009 Global Financial Crisis and the COVID-19 pandemic respectively.Despite the increase in retrenchments, total employment rose by 10,700 in Q2, extending a streak of growth to 19 consecutive quarters. This was up from 9,400 in the previous quarter, and broadly in line with the 10,400 increase recorded a year earlierResident employment continued to grow, albeit at a slower pace than in the first quarter, driven mainly by hiring in essential and public services. Employment growth in the second quarter was led primarily by non-residents, particularly in the construction and manufacturing sectors.Unemployment also remained low and broadly stable. In June, the overall unemployment rate stood at 2 per cent, unchanged from March. Resident unemployment held steady at 2.9 per cent, while citizen unemployment dipped to 3 per cent from 3.1 per cent in March.The full labour market report for Q2 will be released in mid-September.LABOUR MARKET OUTLOOKThe ministry noted that labour demand appeared resilient, with forward-looking indicators improving in June.The proportion of firms that had been expecting to hire rose to 43.9 per cent in June, up from 40.6 per cent in May. The share of firms that had been expecting to increase wages in the same period also climbed to 29.3 per cent from 23.7 per cent, while the proportion expecting to retrench workers fell to 2.7 per cent from 3.2 per cent.MOM said the improvement in hiring and wage expectations, as well as lower anticipated retrenchments, suggested that labour demand remained resilient even as companies stayed cautious amid economic uncertainties and ongoing restructuring in some sectors."In view of the headwinds in the global economy and rapid technological change, it is important for companies and workers to proactively and continuously upgrade their competitive capabilities," it added.The Monetary Authority of Singapore also noted in April that hiring and wage growth were likely to ease in 2026 due to the Middle East conflict.Employers can make use of existing schemes, such as the career conversion programmes and Mid-Career Pathways Programme, to reskill and upskill their workers.Workers are encouraged to take proactive steps to improve their employability and access better job opportunities through schemes such as Career Health SG. They can also use career coaching and guidance services provided by the Skills and Workforce Development Agency and NTUC's Employment and Employability Institute, as well as join SkillsFuture training programmes.Fresh graduates facing difficulties finding employment can utilise the Graduate Industry Traineeships, or GRIT, scheme as an alternative entry point into the workforce that enables them to gain industry-relevant skills and experience, MOM said.Eligible involuntarily unemployed individuals can receive temporary financial support of up to S$6,000 (US$4,670) over six months via the SkillsFuture Jobseeker Support scheme while they are looking for jobs, the ministry added.