Singapore recorded a slight increase in retrenchments in the first quarter of 2026, even as employment continued to expand and unemployment remained low.
According to the Ministry of Manpower’s Labour Market Report for Q1 2026, retrenchments rose from 3,690 in Q4 2025 to 3,830 in Q1 2026.
The Straits Times (ST) reported that this was the highest quarterly figure since Q3 2023.
At the same time, total employment grew by 9,400 in Q1 2026, marking the 18th consecutive quarter of employment growth since Q4 2021.
Resident employment growth also strengthened to 5,400, up from 3,100 in the previous quarter.
Among residents, retrenchment incidence remained highest among professionals, managers, executives and technicians (PMETs), at 2.6 per 1,000 employees.
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Degree holders saw the most notable shift by educational qualification, with their retrenchment incidence rising from 2.6 to 3.1 per 1,000 resident employees, the highest among all qualification groups.
MOM said this suggested that restructuring activity in Q1 2026 remained concentrated among higher-educated workers, reflecting ongoing organisational restructuring in professional and knowledge-intensive sectors.
Workers aged 50 to 59 also recorded the highest retrenchment incidence by age group, with the rate rising from 2.8 to 3.1 per 1,000 employees.
Conversely, retrenchment incidence fell among residents with lower educational qualifications.
The rate declined to 0.7 per 1,000 resident employees for those with below-secondary or secondary qualifications, and to 1.1 per 1,000 resident employees for diploma and professional qualification holders.
Overall, MOM said the increase in retrenchments was concentrated in external-oriented sectors such as Manufacturing, Financial Services, and Professional Services.
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Business reorganisation or restructuring remained the main reason for retrenchment, accounting for 73.8% of cases, compared with 9.3% for cost-cutting.
Despite the slight increase in retrenchments, labour market outcomes remained resilient.
The resident re-entry rate into employment within six months of retrenchment rose for the second consecutive quarter, from 57.4% in Q4 2025 to 60.7% in Q1 2026.
MOM said the improvement was broad-based across occupational and educational groups.
Re-entry rates for PMETs rose from 56.4% to 59.6%, while degree holders saw an improvement from 53.9% to 58.3%.
Younger residents below 30 also recorded a meaningful increase in re-entry rates, from 70.8% to 87.1%.
Singapore’s labour market continued to expand in Q1 2026, though employment growth moderated from the previous quarter.
Total employment increased by 9,400, down from the 17,700 increase recorded in Q4 2025.
MOM said the slowdown was mainly due to slower non-resident employment growth, which was concentrated in Construction and Manufacturing.
Source: CK Seng on Pexels, for illustration purposes only
Resident employment, however, strengthened from 3,100 in Q4 2025 to 5,400 in Q1 2026.
These resident employment gains were led by Administrative & Support Services, particularly employment activities and travel-related services.
The increase included roles such as customer service staff, administrative clerks, and travel agency and related clerks.
Resident employment also rose in Transportation & Storage and Public Administration.
Source: Maksim Romashkin on Pexels, for illustration purposes only
However, Financial & Insurance Services saw a decline in resident employment.
MOM said this was largely concentrated among self-employed persons in the insurance and related services segment, even as employment by financial institutions, excluding self-employed persons, grew.
The ministry noted that firms may be prioritising leaner but permanent headcount, while workers gravitate towards stability amid uncertainty.
Job vacancies declined from 77,700 in December 2025 to 73,300 in March 2026, indicating some moderation in labour demand.
MOM said the decline was driven mainly by fewer non-PMET vacancies.
The overall vacancy-to-unemployed-person ratio also fell from 1.58 in December 2025 to 1.46 in March 2026, although the number of job vacancies continued to exceed the number of unemployed persons.
Source: coworkingspace Replus on Pexels, for illustration purposes only
Unemployment rates remained low and stable in March 2026, with the overall unemployment rate at 2.0%, the resident unemployment rate at 2.9%, the citizen unemployment rate at 3.1%, and the resident long-term unemployment rate at 0.9%.
MOM said labour market conditions remained resilient, though firms may take a more cautious approach to hiring and wage increases amid global economic uncertainty and geopolitical tensions.
The number of employees placed on short work-week or temporary layoff rose for the fourth consecutive quarter, from 960 in Q4 2025 to 1,230 in Q1 2026.
This was the highest figure since Q4 2021.
The increase was mainly seen in Construction, where the number rose from 80 to 390, and Manufacturing, where it rose from 170 to 260.
By occupational group, the increase was mainly among production and transport operators, cleaners and labourers, rising from 350 to 710.
Source: Tuan Vy on Pexels, for illustration purposes only
MOM said most affected employees were placed on short work-week rather than temporary layoff.
It added that with retrenchment levels still low and vacancies remaining robust, the rise in such arrangements suggested that firms were using reduced working hours to manage temporary changes in manpower demand instead of retrenching workers.
MOM said retrenchments are expected to stabilise, with the proportion of firms intending to retrench falling from 4.4% in February 2026 to 3.6% in March 2026.
While retrenchment levels remained within non-recessionary norms, MOM’s report said retrenchment activity remained concentrated among higher-educated workers, reflecting ongoing restructuring in professional and knowledge-intensive sectors.
Manpower Minister Tan See Leng also addressed workers’ concerns about economic uncertainty and the impact of AI on jobs.
Source: Tan See Leng on Facebook
According to CNA, Dr Tan was speaking to reporters during a visit to Star Furniture on 15 June when he acknowledged these concerns, but said there were still “some encouraging signs” in the labour market.
He also pointed to the Government’s continued support for workers through reskilling and job redesign.
Close to 400 people benefited from Workforce Singapore’s Career Conversion Programmes in 2025, which helped workers train for redesigned roles, including those involving AI components.
Dr Tan said this was why it was important for workers to “pick up new skills and adapt” as job requirements continue to evolve.
Also read: Hotel Miramar in Havelock to retrench 108 employees when it closes down in end-Oct
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