Singapore Job Market Expands Despite Highest Retrenchments Since 2020

Divergent Signals in the Lion City

Singapore's labour market delivered a split verdict in the second quarter of 2026: employers added 10,700 net jobs even as retrenchments climbed to their highest level in nearly six years. The Ministry of Manpower released preliminary data on July 31 showing 4,500 workers were laid off between April and June, up 17.5% from the 3,830 cut in the first quarter. That figure marks the steepest quarterly tally since the final three months of 2020, though it still sits below the pandemic peaks that ranged from 5,640 to 9,120 redundancies.

The job cuts concentrated in export-dependent industries, particularly information and communications and manufacturing, where companies pursued business restructuring. Foo See Yang, managing director and strategic business group head at Persol Asia-Pacific, explained that outward-oriented sectors depend on exports, foreign investment, and global supply chains, leaving them vulnerable to shifts in trade policy and geopolitical friction. Persistent uncertainty has pushed firms to re-examine operating models and rationalize headcount, he noted.

Where the Jobs Came From

Total employment rose by 10,700 in Q2, edging above the 9,400 gain in the first quarter and tracking close to the 10,400 added in the same period of 2025, according to the ministry. Foreign workers drove much of the expansion, particularly in construction and manufacturing. Growth in resident employment, covering both Singaporean citizens and permanent residents, slowed compared with the previous quarter and focused on essential services and the public sector.

Public infrastructure projects continue to generate openings, Foo said. Government plans to expand connectivity and upgrade critical infrastructure to accommodate the city-state's growing population are fueling demand across construction, engineering, operations, and maintenance roles. Because these projects stem from national planning priorities, hiring in these areas tends to remain steady even when private-sector recruitment cools.

Job-board data reinforce that public-sector momentum. A spokesperson for Jobstreet by SEEK said postings in government and defence jumped 49% from the first quarter to the second. While automation and artificial intelligence can handle routine tasks, areas such as policymaking and stakeholder engagement still require human judgment, the spokesperson added.

Unemployment Holds, Sentiment Improves

The unemployment rate stayed at 2% in June, unchanged from the previous quarter. Forward-looking indicators, however, suggest employers are regaining confidence. The share of firms expecting to hire over the next three months rose to 43.9% in June, up from 40.6% in May. Over the same span, the proportion planning wage increases climbed to 29.3% from 23.7%, while the share anticipating further retrenchments fell to 2.7% from 3.2%.

DBS senior economist Chua Han Teng said the ministry's forward-looking gauges point to contained layoffs ahead, even as businesses adjust to a fast-changing economic landscape. A separate survey released by the Economic Development Board on the same day found that 74% of manufacturing firms expect employment to remain broadly stable in the third quarter. All clusters except transport engineering anticipate larger workforces, according to that report.

The Ministry of Manpower noted that the uptick in hiring and wage sentiment was broad-based but still below pre-crisis levels recorded in February, before an energy shock triggered by conflict in Iran. That gap suggests firms will continue exercising caution with staffing and compensation decisions in the near term, the ministry said.

Adapting to Persistent Headwinds

Businesses are growing more accustomed to operating amid tariffs, geopolitical tensions, and supply-chain disruptions, Foo observed. Companies increasingly factor these risks into long-term resilience planning rather than treating them as temporary shocks. As confidence stabilizes, employers are moving proactively to secure and retain talent needed for growth and transformation, he added.

The contrast between rising retrenchments and net job creation underscores the uneven impact of global volatility across Singapore's economy. Sectors tied to international demand face restructuring pressure, while government-led infrastructure and essential services continue to absorb workers. For the city-state's policymakers and employers, the challenge will be ensuring that displaced workers in export-facing industries can transition into areas where demand remains strong, preserving the resilience that has kept unemployment anchored at 2% even as global uncertainty persists.