SINGAPORE’S retrenchments more than doubled in 2023, while employment growth slowed after 2022’s sharp post-pandemic rebound, advance figures from the Ministry of Manpower (MOM) showed on Wednesday (Jan 31).

Retrenchments spiked in 2023 to 14,320. This figure is more than twice that of 2022’s record low of 6,440. However, on a quarterly basis, retrenchments eased in the fourth quarter.

Business reorganisation or restructuring remained the top reason for retrenchments in 2023, said MOM, with notable increases in outward-oriented sectors such as wholesale trade, IT services and electronics manufacturing.

But it added: “Statistics on re-entry into retrenchment have so far showed that the majority of retrenched workers typically re-enter within six months post-retrenchment, and often in a different sector signalling the transferability of their skill sets.”

The number of retrenchments was significantly above 2021’s figure of 8,020, though below the 26,110 in 2020, the first year of the Covid-19 pandemic.

Total employment – excluding migrant domestic workers – grew by 89,400 for the full year. This was a normalisation from 2022’s post-pandemic increase of 227,800, though still the largest increase since 2014.

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Slower growth was recorded for both residents and non-residents. Employment growth came mainly from non-residents, led by the construction sector amid continued demand for private and public sector projects.

Resident employment growth was spread across sectors. It was driven by health and social services and public administration and education, as well as outward-oriented sectors such as financial and professional services.

Despite higher retrenchments and slower employment growth, overall unemployment remained “stable and low” as the labour market stayed tight.

The overall unemployment rate improved to 1.9 per cent from 2022’s 2.1 per cent. Resident unemployment fell to 2.7 per cent, from 2.9 per cent previously, while citizen unemployment edged down to 2.9 per cent, from 3 per cent before.

For 2024, MOM noted improvements in both business expectations and economic growth prospects.

In the last quarter of 2023, more firms indicated an intention to hire in the next three months: 47.7 per cent, up from 42.8 per cent in the previous quarterly survey. The share of firms intending to raise wages similarly rose: to 32.6 per cent, from 18 per cent before.

But the ministry cautioned that downside risks in the global economy remain. Business reorganisation or restructuring is likely to continue, possibly leading to further retrenchments.

For the fourth quarter of 2023, advance estimates show that employment levels expanded for the ninth straight quarter, though this growth moderated significantly.

Total employment, excluding domestic workers, rose 8,400 in Q4, down from 23,600 in Q3. MOM said: “This moderation was not unexpected as weaker hiring expectations and declining job vacancies from previous quarters indicated cooling labour demand.”

Retrenchments fell quarter-on-quarter to 3,200 in Q4. This was down from 4,110 in Q3, with a surge in layoffs in wholesale trade.

December’s unemployment rates were unchanged at 2 per cent overall, 2.8 per cent for residents, and 2.9 per cent for citizens.

The full report of the labour market’s performance in Q4 and full-year 2023 will be released in mid-March.