Singapore retrenchments spike to 6-year high despite job growth

Singapore's labour market is sending mixed signals. On the surface, the numbers look solid: employers added 10,700 jobs in the second quarter of 2026, and the unemployment rate held steady at 2 per cent. But beneath that headline sits a sharper reality. Retrenchments spiked to 4,500 workers in the same three-month period, the highest count since the final quarter of 2020. The Ministry of Manpower released these figures on July 31, and they tell a story of simultaneous expansion and contraction—growth happening in some corners while others shed workers.

The 17.5 per cent jump in layoffs from the previous quarter was not random. It concentrated in sectors that depend on global trade and investment: information technology, communications, and manufacturing. The driver was business restructuring—companies recalibrating their operations, consolidating roles, or shifting work elsewhere. This is not the mass unemployment of the pandemic years, when retrenchments ranged between 5,640 and 9,120 per quarter. But it is the highest number in nearly six years, and it signals that some employers are tightening even as the overall economy grows.

The employment growth that did occur tells its own story. The 10,700 new positions created in the quarter broke down unevenly. Foreign workers filled most of the new roles, particularly in construction and manufacturing. Singaporeans and permanent residents saw slower job growth, with gains concentrated in essential services and the public sector. This divergence matters: it suggests that while the economy is creating jobs, they are not necessarily going to citizens at the same rate, and they are not necessarily in the sectors where retrenchments are happening.

Unemployment itself remained stable at 2 per cent in June, unchanged from the previous quarter. That figure masks the churn underneath—people losing jobs in one sector while others find work in another, or while foreign workers fill vacancies. The overall rate does not capture the disruption experienced by those whose roles were eliminated, particularly in IT and manufacturing, where restructuring has been most aggressive.

Looking forward, employers are signalling cautious optimism. In June, 43.9 per cent of firms said they planned to hire in the next three months, up from 40.6 per cent in May. The share expecting to raise wages also climbed, to 29.3 per cent from 23.7 per cent. But the Ministry of Manpower noted that these figures, while improving, remain below the levels recorded before February, when an energy shock triggered by the Iran war rippled through global markets. That context matters: firms are becoming more willing to hire and pay more, but they are still holding back compared to the pre-crisis moment. Caution persists. The proportion of companies expecting to retrench workers did decline, to 2.7 per cent from 3.2 per cent, suggesting that the worst of the restructuring may have passed. But the labour market is not yet running at full confidence. It is growing, but carefully, with some workers gaining ground while others are pushed out.