Layoffs in Singapore reach highest level since 2009
Author: Kate Whitehead | Date: 21 Sep 2016
Employers taking measures to cut costs, say experts, as number of vacancies also drops
In the first six months of this year, 9,510 workers were made redundant or had their contracts terminated in Singapore - the highest figure since the global financial crisis in 2009, when 18,740 workers lost their jobs in a comparable period.
The figures were released in a report by the Ministry of Manpower which also revealed that job vacancies, which have been falling since last year, dipped below the number of jobseekers for the first time since 2012.
“The decline was across many sectors and occupation groups. Coupled with the increase in job seekers, the seasonally-adjusted ratio of job vacancies to unemployed persons declined to 0.93, the lowest since March 2010,” said the report.
The ministry said it expects labour demand to stay modest for the rest of the year and for layoffs to increase in sectors with weak external demand, as well as those undergoing restructuring.
“The general marketplace across the region is being affected by global sentiment and the concerns over credit issues in China as well as slowing growth there,” said Nick Lambe, managing director at Links International in Hong Kong.
Vincent Romano, managing director of Elliott Scott HR South East Asia, said the increase in redundancies was worrying and would push organisations to cut back on non-essentials.
“People are becoming very cost-conscious. I hope that most CEOs would prefer to cut costs rather than jobs,” said Romano.
He recently learned of an office in Singapore that had removed the potted plants from its reception area in a bid to save money. While that was perhaps an extreme case, Lambe also noted that employers were already taking measures to cut costs.
“We have seen organisations using outsourcing, specifically HR and payroll outsourcing to cut costs but also outsourcing certain processes to other countries with lower costs,” he said, adding that he expected the layoffs to continue through to the fourth quarter of this year.
Lambe said that banking and financial services, as well as luxury retail, were the most affected sectors. However, he also noted that some sectors are looking healthy. “Technology and fintech organisations will weather the storm as technology continues to be more and more involved in our day-to-day lives and businesses,” said Lambe.
Another bright spot was that Singapore’s labour productivity - as measured by value-added per worker - rose by 0.8 per cent in the first half of the year compared with the same period last year. Manufacturing (four per cent), construction (1.5 per cent) and the wholesale and retail trade (3.3 per cent) all saw good productivity growth, while the business services (-2.7 per cent), and information and communications (-1.5 per cent) sectors saw the sharpest declines.
While the unemployment rate of residents rose to three per cent in June from 2.7 per cent in the previous quarter, the Ministry of Manpower noted that foreign employment growth continued at a “moderate pace” for the first half of the year.
Earlier this month, British bank Barclays – which has more than 3,000 staff in Singapore – cut more than 100 jobs from its back office and information and technology operation to reduce costs. Some of those staff were reported to have been offered relocation to India, where the bank is moving many of its global functions to take advantage of lower operating costs.