Singapore Q3 retrenchments rise to 4,800; resident unemployment edges up to 3%: flash data

[SINGAPORE] The number of layoffs rose to 4,800 in Q3, from 4,620 in Q2 – with Singapore’s Ministry of Manpower (MOM) on Friday (Oct 30) warning of “emerging weaknesses in parts of the labour market” in its flash data release.

This was the fifth straight quarter in which retrenchments have edged up.

Retrenchments – which were concentrated in outward-oriented sectors, including information and communications, financial services and manufacturing – were driven mainly by business restructuring, according to MOM.

This possibly reflects artificial intelligence-related displacement effects, alongside ongoing cost adjustment measures, said UOB associate economist Jester Koh.

The incidence of retrenchments held steady at two for every 1,000 employees.

Citizen unemployment ticked up to 3.1 per cent in September from 3 per cent in August, while resident unemployment – which includes permanent residents – inched up to 3 per cent, from 2.9 per cent. Overall unemployment stood unchanged at 2 per cent.

Total employment grew by 27,700 in the third quarter, higher than the growth of 11,400 seen in Q2 and up 10.4 per cent year on year. This marked the 20th consecutive quarter of expansion.

Still, most of that growth came from non-residents in construction and manufacturing. Resident employment was supported by essential and public services, but growth in external-facing sectors stayed subdued, MOM said, citing “global economic uncertainty”.

The job market for professional services, including finance and tech, remains subdued, said Maybank analyst Chua Hak Bin, adding that AI might be reducing manpower demand for the higher paying professional services jobs locals are looking for.

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“The Singapore labour market is in a ‘low hire, low quit’ mode, which is likely to persist given the broadening adoption of AI tools,” he said. “A K-shaped economy may become more pronounced if the AI-powered economic boom rewards capital owners disproportionately while workers are displaced.”

A Jobstreet by Seek spokesperson noted that the company recorded an 8 per cent quarter on quarter increase in job postings on its Singapore platform in Q3. They flagged double-digit increases in information and communications technology as well as electrical and electronics job listings.

More postings were also observed in banking and financial services and construction, building and engineering.

The spokesperson noted: “Recruitment can continue within sectors affected by retrenchments, so rising job postings and job losses can coexist.”

But the spokesperson also pointed out that more advertised opportunities do not automatically mean an easier job search for those affected by restructuring, as how closely the available roles match their experience and skills remains key.

Looking ahead, MOM noted that “employers remained cautious about hiring and wage increases amid continued uncertainty”, as both the share of firms expecting to hire and to raise wages in the next three months remained below July’s levels, although both figures improved from August.

In September, the share of firms expecting to hire over the next three months was 42.3 per cent, higher than 30.5 per cent in the preceding month.

Companies expecting to raise wages increased to 19.9 per cent from 16.9 per cent, over the same period.

Amid the “cautiously resilient economic outlook”, DBS senior economist Chua Han Teng expects Singapore’s labour market to be stable for the rest of 2026.

The month-on-month improvement in hiring sentiment pointed to resilient labour demand and continued employment expansion in the near term, but the fact that it remained below both July and pre-Middle East conflict levels suggested that businesses were selective in their recruitment, he added.

The share of firms expecting to retrench also edged up to 3.1 per cent in September, from 2.8 per cent in August. MOM said this warranted close monitoring, alongside higher actual retrenchments.

DBS’ Chua agreed that this figure needed to be watched closely, but nevertheless believes that any near-term increases in retrenchments and unemployment rates should remain contained, with 3.1 per cent still being low.

“We will monitor the re-entry rates of retrenched workers in MOM’s next release to gauge how quickly they secure new employment.”

Koh said that, should the six-month post-retrenchment re-entry rate continue to decline in the third quarter, the slight increases in citizen and resident unemployment and the rise in retrenchments could signal further increases in unemployment rates in the coming quarters.

Additional reporting by Annabeth Leow