Singapore Layoffs Jump to Six-Year High as Firms Restructure

Restructuring Wave Hits Key Sectors

Singapore's labour market delivered a split signal in the second quarter of 2026: layoffs surged to their highest level in nearly six years while overall employment continued to expand. The Ministry of Manpower reported 4,500 retrenchments between April and June, marking a 17.5% increase from the 3,830 recorded in the first quarter.

The figure represents the steepest retrenchment count since Q4 2020, when 5,640 workers lost their jobs during the pandemic recovery phase. This time, the cuts centered on outward-facing industries. Information and communications firms, along with manufacturers, accounted for the bulk of the layoffs, driven primarily by business restructuring rather than wholesale shutdowns.

The pattern aligns with broader shifts across Asia's tech and export hubs. Companies in Seoul, Taipei, and Tokyo have similarly trimmed headcount this year as global demand for electronics and digital services softened. Singapore's open economy, heavily reliant on trade and foreign investment, remains sensitive to these cross-border currents.

Employment Growth Masks Uneven Distribution

Total employment in Singapore rose by 10,700 during the quarter, a modest uptick from 9,400 in Q1 and roughly in line with the 10,400 added in Q2 2025. Yet the composition of that growth reveals diverging fortunes across workforce segments.

Resident employment, covering Singaporeans and permanent residents, expanded at a slower pace than the previous quarter. The gains were concentrated in essential services and public-sector roles, areas less exposed to global trade volatility. Meanwhile, foreign worker intake drove the headline employment number, with construction and manufacturing pulling in the largest shares.

Construction activity has remained elevated as the city-state pushes forward with infrastructure projects and residential development. Manufacturing, despite the retrenchments, still added workers in segments tied to pharmaceuticals and precision engineering, where Singapore retains competitive advantages.

Unemployment Holds Steady

The unemployment rate sat at 2% in June, unchanged from March and consistent with the tight labour market conditions that have characterized Singapore for the past two years. Low unemployment typically signals limited slack, but the uptick in layoffs suggests pockets of stress within specific industries.

For workers in tech roles, the restructuring wave has been particularly acute. Firms that expanded aggressively during the 2021-2023 digital boom have been rationalizing operations, shedding roles in product development, marketing, and middle management. The retrenchment data does not break out job functions, but anecdotal reports from recruitment firms point to white-collar positions bearing the brunt.

Forward Indicators Show Cautious Optimism

Employer sentiment improved modestly heading into the third quarter. The share of firms expecting to hire over the next three months rose to 43.9% in June, up from 40.6% in May. Similarly, the proportion planning salary increases climbed to 29.3%, compared with 23.7% the month prior.

At the same time, the percentage of firms anticipating further retrenchments edged down to 2.7% from 3.2%. The Ministry of Manpower characterized the combined signals as pointing to "resilient" labour demand, though it cautioned that hiring and wage indicators remain below pre-crisis levels recorded in February, before the energy shock triggered by the Iran conflict disrupted regional supply chains.

Energy prices spiked in March and April, raising input costs for manufacturers and logistics operators across Southeast Asia. While prices have since moderated, the episode injected fresh uncertainty into corporate planning. Firms that had been considering expansion put hiring on hold; others accelerated cost reviews that resulted in the Q2 retrenchments.

Regional Context and Policy Implications

Singapore's labour market dynamics sit within a broader regional picture. In Hong Kong, financial services firms have been trimming back-office operations, while in Jakarta, manufacturers have delayed capacity additions amid softer export orders. Tokyo's unemployment rate ticked up in June for the first time in eight months, reflecting similar cross-currents.

For policymakers in Singapore, the challenge lies in sustaining employment growth without fueling wage inflation or skill mismatches. The government has ramped up reskilling programs targeting mid-career workers displaced from tech and manufacturing roles, aiming to channel them into healthcare, green economy sectors, and digital infrastructure.

The SkillsFuture initiative, which subsidizes training, saw a 22% increase in enrollments during Q2, according to separate government data. Whether that translates into durable reemployment remains an open question, particularly for workers over 50 who face longer job-search timelines.

The Ministry of Manpower expects firms to maintain caution in hiring and wage decisions through the remainder of 2026, reflecting both the lingering effects of the energy shock and uncertainty over global demand. For now, Singapore's labour market continues to add jobs, but the composition and quality of that growth will determine whether the current resilience holds into 2027.