Singapore retrenchments rise 17.5% in Q2 to highest since 2020; employment grows

[SINGAPORE] Retrenchments in Singapore rose 17.5 per cent in the second quarter of 2026 to their highest level since the fourth quarter of 2020, when the Covid-19 pandemic was weighing heavily on the labour market, advance data from the Ministry of Manpower (MOM) showed on Friday (Jul 31).

Still, total employment grew for the 19th consecutive quarter, while unemployment rates remained low and stable, the ministry said.

“Labour demand remains resilient, and surveys indicate an uplift in employers’ hiring sentiments,” MOM added.

The number of retrenchments increased to 4,500 from 3,830 in the previous quarter, while the incidence rose from 1.6 per 1,000 employees to 1.9.

The increase was driven mainly by business restructuring in selected outward-oriented sectors such as information and communications, and manufacturing.

Nevertheless, quarterly retrenchments remained “well below levels typically seen during periods of downturn”, said MOM.

For instance, quarterly retrenchments ranged from 5,980 to 12,760 during the global financial crisis and from 5,640 to 9,120 during the Covid-19 pandemic.

Separately, total employment grew by 10,700 in Q2, up from 9,400 in the previous quarter, and broadly similar to the 10,400 increase recorded in the same period last year.

The expansion was mainly driven by non-residents in the construction and manufacturing sector.

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While resident employment also continued to increase, mainly in essential and public services, MOM noted that the growth was slower than in the previous quarter. 

Meanwhile, unemployment rates “remained low and stable”.

In June, the overall and resident unemployment rates stood at 2 per cent and 2.9 per cent, respectively, unchanged from March.

The citizen unemployment rate edged down to 3 per cent from 3.1 per cent over the same period.

Improved sentiments

MOM said forward-looking indicators improved in June, suggesting that labour demand remained “resilient”, even as firms stayed cautious amid economic uncertainty and continued business restructuring in some sectors.

Its surveys found that the share of firms expecting to hire over the next three months rose to 43.9 per cent in June from 40.6 per cent in May.

Similarly, the share expecting to raise wages increased to 29.3 per cent from 23.7 per cent over the same period.

At the same time, the share of firms expecting to retrench fell to 2.7 per cent from 3.2 per cent.

“Although the uptick in hiring and wage sentiment was broad-based across sectors, these indicators remained below their pre-crisis levels in February,” MOM said.

“This suggests that firms will likely continue to adopt some caution with their hiring and wage decisions in the near term.”

MOM added that “in view of the headwinds in the global economy and rapid technological change”, companies and workers should proactively and continuously upgrade their competitive capabilities.