S'pore retrenchments more than doubled in 2023

Retrenchments in Singapore more than doubled in 2023 from the previous year to 14,320, even as overall unemployment rates fell slightly.

Total employment growth here for the full year of 2023 slowed amid weaker economic conditions, following a sharp post-pandemic rebound in 2022.

According to preliminary estimates released by the Ministry of Manpower (MOM) on Jan 31, the more muted pace of growth was seen for both residents and non-residents.

On a quarterly basis, while the increase in total employment, excluding migrant domestic workers, moderated significantly, it continued to grow for the ninth consecutive quarter, expanding by 8,400 in the last quarter of 2023.

The ministry said: “This moderation was not unexpected as weaker hiring expectations and declining job vacancies from previous quarters indicated cooling labour demand.”

Business reorganisation or restructuring remained the top reason for retrenchments in 2023, due in part to the impact of global economic headwinds on outward-oriented sectors such as wholesale trade, information technology services and electronics manufacturing.

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However, on a quarterly basis, the number of retrenchments in the fourth quarter of 2023 fell to 3,200 compared with 4,110 in the third quarter, which was marked by a surge in wholesale trade retrenchments.

MOM added: “While retrenchments rose in electronics manufacturing, the number of retrenchments in other sectors remained broadly stable or declined.”

For the full year of 2023, the overall unemployment rate dipped slightly to 1.9 per cent, from 2.1 per cent in 2022.

The rate for Singaporeans was 2.9 per cent in 2023, down from 3 per cent, while the rate for Singaporeans and permanent residents combined was 2.7 per cent, down from 2.9 per cent.

On a monthly, seasonally adjusted basis, the unemployment rates in December 2023 were the same as that in November. The overall rate was 2 per cent.

While employment prospects might be looking up, MOM cautions that as downside risks in the global economy remain, business reorganisation or restructuring will continue and may lead to further retrenchments.