Singapore retrenchments climb in Q1, with sharpest rise in incidence among degree holders, older workers: MOM

Singapore retrenchments climb in Q1, with sharpest rise in incidence among degree holders, older workers: MOM The notable shift in retrenchment incidence among higher-educated workers reflects the ongoing restructuring in the professional and knowledge-intensive sectors, says the ministry. SINGAPORE: An ongoing restructuring in professional and knowledge-intensive sectors drove a notable shift in layoffs among degree holders in the first quarter of 2026, with the incidence of retrenchment rising sharply for this group, the Manpower Ministry (MOM) said on Monday (Jun 15). The incidence of retrenchment, which refers to the rate of being laid off within a specific demographic, also rose among older workers aged 50 to 59 – rising from 2.8 to 3.1 per 1,000 resident employees. Overall, the number of retrenchments went up in this time period. MOM's latest quarterly labour market data showed retrenchments rising to 3,830 in Q1 2026, up from 3,690 in Q4 2025. This was largely driven by restructuring or reorganisation rather than cost-cutting, said MOM. Retrenchments were mainly in external-oriented sectors like manufacturing, financial services and professional services. The overall incidence of retrenchment, at 1.6 per 1,000 employees, remains "within non-recessionary norms", the ministry added. Among degree holders, retrenchment incidence rose sharply from 2.6 to 3.1 per 1,000 resident employees. This was the highest incidence among all educational qualification groups, said MOM. This suggests that restructuring activity in Q1 2026 remained concentrated among higher-educated workers, reflecting "ongoing organisational restructuring in professional and knowledge-intensive sectors", said the ministry. In contrast, retrenchment incidence fell to 0.7 per 1,000 resident employees for those with secondary school qualifications or lower, and to 1.1 per 1,000 resident employees for those with diploma and professional qualifications. Professionals, managers, executives and technicians (PMETs) continued to have the highest retrenchment incidence among all occupational groups at 2.6 per 1,000 resident employees, unchanged from the previous quarter. Despite the slight uptick in retrenchments, MOM said labour market outcomes remained resilient. For example, the rate of residents returning to employment within six months after retrenchment improved to 60.7 per cent from 57.4 per cent in the previous quarter. "Improvements were observed among PMETs, degree holders and younger residents aged below 30, suggesting that retrenched workers continued to find employment within a reasonable timeframe," said the ministry. Speaking to reporters, Manpower Minister Tan See Leng said: "Retrenchment is never easy. But what encourages me is that we are seeing more retrenched workers finding their way back to employment quicker." He added that the new Skills and Workforce Development Agency will be "better positioned" to help workers navigate the labour market and connect to new prospects through enhanced career guidance, job-matching and reskilling support. IMPACT OF ARTIFICIAL INTELLIGENCE For the first time, MOM's quarterly labour market report addressed the impact of AI on the workforce by including data the ministry first released in a detailed report in April. "AI will indeed change the way we work, but what we are seeing so far is that it's actually helping to reshape jobs more than replace them," said Dr Tan. According to the April data, 6.2 per cent of firms that are implementing or piloting AI usage reported headcount reductions, while 8.5 per cent reported lower hiring. It was more common for firms to redesign job functions, with 18.9 per cent of respondents doing so after adopting AI. Dr Tan also pointed out that workers had positive experiences, with about 85 per cent of AI users reporting improvements in productivity, time savings and a higher quality of work. "This is exactly why helping workers to pick up new skills and adapt to changing job requirements matters so much as more companies adopt AI," he said. He said the government will continue to provide this support, pointing to the roughly 400 people who benefited from Workforce Singapore's career conversion programmes to train for redesigned roles, including those with AI components, in 2025. Only 28.5 per cent of companies in Singapore have adopted the technology. Adoption rates vary across sectors and are highest in digitally intensive and knowledge-based sectors such as information and communications, professional services and financial and insurance services. SLOWER EMPLOYMENT GROWTH While the number of retrenchments rose from January to March 2026, the labour market continued to expand, albeit at a slower pace from the previous quarter. Total employment grew by 9,400 in Q1 2026, slower than the 17,700 increase in Q4 2025. The moderation was mainly driven by slower growth in non-resident employment, which is concentrated in the construction and manufacturing sectors, said MOM. "I know many Singaporeans are concerned about the economy, the global uncertainty and what AI means for their jobs," said Dr Tan. "These are very real concerns. We understand the challenges that many workers and many fresh graduates have faced, but I want to reassure everyone that even amidst these uncertainties, there are some encouraging signs in the labour market." He pointed to resident employment growing at a faster rate compared with the previous quarter, from a 3,100 increase in Q4 2025 to 5,400 in Q1 2026. These gains were in administrative and support services, mainly in employment activities and travel-related services, and in jobs such as customer service, administrative clerks and travel agency clerks. Resident employment also grew in transportation and storage, and public administration. Despite higher employment by financial institutions, resident employment shrank in the financial and insurances services category, which reflects that the effect is largely concentrated among self-employed workers in this sector. "Firms may be prioritising leaner but permanent headcount, while workers gravitate towards stability amid uncertainty," said MOM. Job vacancies fell to 73,300 in March from 77,700 in December 2025, driven by a decline in non-PMET vacancies. There continued to be more job vacancies than unemployed people, although the overall ratio of vacancies to the unemployed declined to 1.46 in March from 1.58 in December 2025. Unemployment rates in March remained low and stable, said MOM – at 2 per cent overall, 2.9 per cent for residents and 3.1 per cent for citizens. The resident long-term unemployment rate held steady at 0.9 per cent. ALTERNATIVES TO RETRENCHMENT The number of employees placed on short work-weeks or temporary layoffs increased to 1,230 in Q1 2026, up from 960 in the previous quarter. After rising for four consecutive quarters, the number of those placed in such alternative arrangements to retrenchments is now at its highest level since Q4 2021, after reaching unprecedented highs during the COVID-19 pandemic. Short work-weeks involve reducing hours or working days, while temporary layoffs are when the employee is asked to stop coming to work for a period of time due to a lack of work. These interim measures are typically read as indicators of economic slowdown, but are seen as better alternatives to retrenchment as they do not completely remove employee benefits and indicate a company's commitment to its workers, MOM has said. The latest MOM data point to an increased use of such measures in construction and manufacturing, and from production and transport operators, cleaners and labourers in the latest quarter. "With retrenchment levels remaining low and vacancies robust, the uptrend in employees on short work-week or temporary layoffs reflects firms' increased use of reduced working hours to absorb temporary changes in manpower demand rather than retrench workers," said MOM. HISTORICAL LOW RESIGNATION RATES The ministry also noted record lows in resignation rates, which it linked to workers being increasingly reluctant to leave their current positions amid heightened caution over global uncertainties. The average monthly resignation rate of 1 per cent in Q1 2026 is a historical low, while the financial and insurance services sector recorded its lowest-ever resignation rate of 0.6 per cent. In high-turnover sectors like food and beverage services and retail trade, resignation rates fell to multi-year lows of 1.8 per cent and 1.4 per cent respectively. The average monthly recruitment rate of 1.6 per cent is also among the lowest in years, said MOM. The ministry expected labour market conditions to remain resilient, although firms may adopt a more cautious approach in hiring and wage increases amid heightened global economic uncertainty and geopolitical tensions. "Labour demand is likely to moderate if external conditions weaken further and elevated global input costs persist," it added.