Singapore Retrenchments Hit 4,500 in Second Quarter Amid Tech and Manufacturing Shake-Out

Layoffs Surge in Export-Oriented Sectors

Singapore recorded 4,500 job losses between April and June, a 17 percent climb from the previous quarter and the steepest tally since the final quarter of 2020, when 5,640 workers were retrenched, preliminary figures from the Ministry of Manpower show. The uptick centers on outward-facing industries, particularly information and communications as well as manufacturing, where companies have been reconfiguring operations in response to shifting trade policies and geopolitical friction.

Business restructuring accounted for the bulk of the retrenchments, the ministry said. Foo See Yang, managing director and strategic business group head at human resource solutions firm Persol Asia-Pacific, noted that sectors reliant on external demand remain exposed to trade volatility and global economic swings. Persistent uncertainty has pushed many firms to rethink operating models and trim headcount accordingly.

Despite the jump, quarterly layoffs remain well below the peaks seen during the 2009 global financial crisis, which ranged from roughly 5,980 to 12,760, and the pandemic period of 2020-2021, when retrenchments ran between 5,640 and 9,120 per quarter.

Labor Market Holds Steady

The broader employment picture stayed resilient. Overall job creation reached 10,700 during the quarter, while the unemployment rate held at 2 percent. Singapore's economy expanded 5.7 percent year-on-year in the same period, a deceleration from the 6.3 percent pace recorded in the first quarter yet still above the government's full-year forecast. The stronger-than-anticipated performance has prompted several economists to lift their 2026 growth projections, according to data compiled by Bloomberg.

Business sentiment surveys conducted in June point to improving labor demand. Close to 44 percent of employers expect to add staff over the next three months, up from 40.6 percent in May. Wage-increase expectations also rose, with 29.3 percent of firms planning to lift pay, compared with 23.7 percent the month before. Meanwhile, the share of companies anticipating layoffs edged down to 2.7 percent from 3.2 percent.

Caution Ahead

The ministry characterized these shifts as signs of resilient labor demand but flagged that expectations remain below the levels recorded in February, before tensions in the Middle East triggered an energy-price shock. That suggests firms are likely to adopt a measured stance on hiring and compensation decisions in the near term, balancing growth prospects against lingering external risks.

For a city-state that depends heavily on trade and financial services, the second-quarter retrenchment figures underscore the exposure of its most globally integrated sectors. Information and communications companies, many of which serve multinational clients or operate regional hubs, have been particularly quick to adjust workforce levels when overseas orders soften or when parent firms initiate global cost reviews. Manufacturing, another pillar of Singapore's economy, faces similar pressures as supply-chain realignments and tariff uncertainties weigh on production planning.

While the headline layoff number marks a five-year high, the context matters. Unemployment remains historically low, and net job creation stayed positive. The challenge for policymakers and business leaders alike will be navigating a period in which geopolitical and trade headwinds continue to buffet outward-facing industries, even as domestic demand and services activity provide ballast. Employers appear to be threading that needle for now, expanding payrolls overall while selectively restructuring in segments most vulnerable to external shocks.

The coming quarters will test whether the modest uptick in hiring and wage expectations translates into sustained momentum or whether firms pull back further if global conditions deteriorate. For Singapore's workforce, the divergence between sectors remains stark: those tied to domestic services and infrastructure continue to add roles, while tech and manufacturing employees face greater volatility as companies recalibrate for an uncertain trade environment.