Retrenchments rise slightly in Q3 amid restructuring, but hiring remains firm

[SINGAPORE] Retrenchments in Singapore have risen marginally to 3,670 in Q3 – up from the previous quarter’s 3,540 – largely driven by firms restructuring to stay competitive against the global economic uncertainty.

Fewer were due to recession, downturn in the industry, poor business or business failures, or concerns of high costs, the Ministry of Manpower’s (MOM) quarterly Labour Market Report released on Thursday (Dec 11) indicated.

The retrenchments were concentrated in growth sectors such as financial services, professional services and information and communications. 

Residents formed the majority, 74.2 per cent or 2,720, of all retrenched employees in Q3.

MOM said the incidence of retrenchment increased across most age groups, except for seniors aged 60 and over.

Over the quarter, there was a higher incidence of retrenchment among younger residents aged below 30 (from 0.7 to 0.8 per 1,000 resident employees) and those in their 30s (from 1.6 to 1.9).

Resident re-entry rate into employment within six months post-retrenchment also declined slightly to 55.4 per cent in Q3, from 56.3 per cent in Q2. 

MOM added that more employers chose to place employees on short work-week or temporary layoff (800 in Q3 compared with 620 in Q2), rather than retrench employees.

While MOM said the overall incidence of retrenchments remained “low”, it noted that the share of firms planning redundancies in the next three months rose to 2.3 per cent in September, up from 1.9 per cent in June, reflecting continued global uncertainty.

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Strong expansion

Meanwhile, resident employment in Singapore rose by 5,600 in Q3, driven by the financial and insurance services, and health and social services sector. 

Non-resident employment rose by 19,500, primarily due to the hiring of work-permit holders in construction and manufacturing. 

Overall, total employment increased by 25,100 in Q3, more than double the 10,400 gain in Q2.

MOM attributed this strong expansion of the labour market to Singapore’s continued economic growth.

The Ministry of Trade and Industry said Singapore’s economy grew by 4.2 per cent year-on-year in Q3, extending the 4.7 per cent growth in Q2. On a quarter-on-quarter basis, it expanded by 2.4 per cent, faster than the 1.7 per cent growth in Q2.

Job vacancies eased slightly to 69,200 in September – down from 76,900 in June – though vacancies for professionals, managers and executives have remained firm, said MOM. 

With this drop, there are now more job openings compared to unemployed persons, with 1.49 vacancies per job seeker in September, up from 1.35 in June. 

“The moderation in job vacancies in 2025 was driven not by rising retrenchments or unemployment, but by reduced churn and slower hiring,” said MOM.

The recruitment rate (1.8 per cent in Q3) has stayed above the resignation rate (1.2 per cent) since the pandemic, but both have trended down since late 2022 and now sit below their 10-year averages.

“This suggests firms are managing headcount through natural attrition rather than layoffs, while employees are switching jobs less often amid fewer perceived opportunities, resulting in lower labour mobility,” said MOM.

Unemployment rate in September remained similar to June’s, with overall unemployment rate at 2 per cent and the resident rate at 2.8 per cent. 

Although economic uncertainties have eased since the first half of 2025, MOM said they “remain elevated and will continue to weigh on firms”, signalling a moderation in labour demand.

Business expectations also point to greater caution in hiring and wage increases over the next three months.

Outward-oriented firms still show stronger hiring intentions, MOM noted, though they are less likely than domestic-oriented firms to raise wages.