PUTRAJAYA (Malaysia) - MALAYSIA has shed 26,000 jobs since the global financial crisis blew up in September and nearly twice as many workers could lose their jobs this year as struggling manufacturers cut output, a senior government official said.

'It (unemployment) is going to be quite long and badly affected,' Sheikh Yahya Sheikh Mohamed, deputy director of labour in Malaysia's Human Resources Ministry, told Reuters in an interview.

FLAGGING demand for electronics, which account for 40 per cent of Malaysia's exports, has led several companies to announce job cuts including Flextronics International, Western Digital, Intel Corp and Japanese electronics company Panasonic Corp. The government has announced various measures to prop up local employment, but Mr Yahya said foreigners would still be hired in the absence of local interest. ... more

Malaysia lost 33,000 jobs in 2008, the bulk of them in the last few months as the global crisis suddenly worsened and Asia's key export markets in the West slipped into recession.

Some 40,000 to 50,000 more jobs are expected to be lost this year, Mr Yahya said.

But job cuts in the current downturn will not be as severe as during the 1997/98 Asia financial crisis, when Malaysia lost 84,000 jobs, he added.

The figures do not include illegal workers in industries ranging from plantations to construction.

Deputy Prime Minister Najib Razak said last week Malaysia's unemployment rate will rise to 4.5 per cent in 2009 from 3.7 per cent last year. This amounts to nearly 500,000 unemployed in 2009, based on the latest third-quarter labour figures.

Fourth-quarter numbers have not yet been published.

The unemployment rate, however, is relatively better than some others in the region like the Philippines, where the unemployment rate stood at 7.7 per cent in January.

Of the nearly 26,000 jobs lost in Malaysia since October, 85 per cent were in the manufacturing sector, Mr Yahya said. -- REUTERS