Singapore Retrenchments Jump to Four-Year High as Firms Restructure

Layoffs Climb Amid Sector Reorganization

Singapore recorded 4,500 retrenchments in the second quarter of 2026, a 17.5 percent increase from 3,830 in the first quarter and the highest quarterly figure since 2020, according to advance data from the Ministry of Manpower. The retrenchment rate rose to 1.9 per 1,000 employees from 1.6 in the previous quarter.

Business restructuring in outward-facing sectors drove the increase. Information and communications firms and manufacturers accounted for the bulk of layoffs as companies adjusted their operations to shifting market conditions. The ministry emphasized that quarterly retrenchment figures remain well below levels typically seen during economic downturns. During the global financial crisis, quarterly layoffs ranged between 5,980 and 12,760, while the Covid-19 pandemic saw figures between 5,640 and 9,120.

Employment Expands Despite Headcount Cuts

Total employment grew by 10,700 in the second quarter, up from 9,400 in the first quarter and roughly matching the 10,400 increase recorded in the same period last year. The expansion marked the 19th consecutive quarter of employment growth.

Non-resident workers powered the gains, concentrated in construction and manufacturing. Resident employment also increased, mainly in essential and public services, though at a slower pace than the previous quarter. The divergence underscores how Singapore's labor market continues to rely on foreign workers to fill gaps in capital-intensive and infrastructure sectors, while resident job creation centers on government-linked and service roles.

Unemployment rates held steady. The overall unemployment rate stood at 2 percent in June, unchanged from March. The resident unemployment rate remained at 2.9 percent, while the citizen unemployment rate edged down to 3 percent from 3.1 percent.

Hiring Sentiment Improves Cautiously

Forward-looking indicators showed modest improvement in June. The share of firms expecting to hire over the next three months rose to 43.9 percent from 40.6 percent in May, according to the ministry's surveys. The proportion anticipating wage increases climbed to 29.3 percent from 23.7 percent over the same period.

At the same time, the share of firms expecting to retrench fell to 2.7 percent from 3.2 percent. The uptick in hiring and wage sentiment was broad-based across sectors, suggesting labor demand remains resilient even as firms navigate economic uncertainty and ongoing business restructuring.

However, these indicators remain below pre-crisis levels recorded in February, pointing to continued caution. Companies are likely to adopt measured approaches to hiring and wage decisions in the near term as they balance growth ambitions against global economic headwinds and rapid technological change.

What Comes Next

The divergence between rising retrenchments and sustained employment growth reflects the dual nature of Singapore's labor market adjustment. Sectors exposed to global demand and technological disruption are trimming headcount, while domestic-facing industries and public services continue absorbing workers.

For policymakers, the challenge lies in ensuring that workers displaced by restructuring can transition into growing sectors. The ministry noted that companies and workers should proactively upgrade their competitive capabilities in view of global economic headwinds and rapid technological shifts.

The next quarter will test whether hiring sentiment translates into actual job creation or whether firms remain cautious amid persistent uncertainty. With retrenchment levels still manageable by historical standards and unemployment rates stable, Singapore's labor market retains fundamental resilience, but the trajectory depends on how quickly restructuring sectors stabilize and whether new demand emerges to absorb displaced talent.