Singapore labour market expanded in 2025, but retrenchments ticked up in Q4: MOM

SINGAPORE – Singapore’s labour market continued to expand in 2025 on the back of strong economic performance and sustained demand, though it faces more risks in 2026 from geopolitical uncertainties.

There were also indications in the final quarter of 2025 of more challenges for the job market as quarterly retrenchments ticked up and the year-on-year job vacancy ratio dropped.

For the whole of 2025, the number of employed residents – meaning Singapore citizens and permanent residents – grew by 11,600, up from an 8,800 growth in the previous year, the Ministry of Manpower (MOM) said on March 20 in its latest labour market report.

Singapore citizens make up the overwhelming majority – around 85 per cent – of employed residents here.

Job vacancies continued to outnumber job seekers, MOM said.

There were 1.58 vacancies for every unemployed person in December 2025. The ratio is up from 1.5 in September 2025, but lower than the 1.64 posted in December 2024.

The number of job vacancies rose from 69,600 in September 2025 to 77,700 in December 2025.

About 70 per cent of the vacancies were for jobs typically filled by residents.

These roles included those in professional services and financial services, as well as health and social services.

The number of employed foreigners grew by 43,900 in 2025, up from a growth of 35,700 recorded in 2024. Work permit holders in the construction sector formed the bulk of the growth.

The net employment growth of 11,600 among residents was largely driven by financial services, as well as the health and social services sectors.

Conversely, resident employment declined in information and communications, as well as in professional services, after a marked increase in 2024.

Employment in total grew by 55,500 in 2025, compared with a growth of 44,500 in 2024.

MOM said the unemployment rates remained “low and stable” in 2025, as did the resident long-term unemployment rate.

In December 2025, the unemployment rate stood at 2 per cent overall, 2.9 per cent for residents and 3 per cent for citizens. This was slightly higher than a year earlier, when the rates were 1.9 per cent overall, 2.8 per cent for residents and 2.9 per cent for citizens.

Ms Julia Ng, chief workforce development officer at the Singapore Business Federation, said the rise in unemployment reflects longer job matching rather than weaker hiring demand. 

“Employers are placing greater emphasis on job readiness, practical experience and speed-to-productivity, particularly skills related to digitalisation, data and artificial intelligence,” she said. “This makes matching more selective and can lengthen job search duration for some younger job seekers.”

Ms Ng also noted that businesses are responding to higher energy and supply chain costs with more disciplined and selective hiring, rather than broad hiring freezes. 

“Companies are prioritising revenue-critical and operational roles, while tightening approval cycles for discretionary headcount. This is most evident in energy-intensive and outward-oriented sectors such as manufacturing and logistics, where firms are also stepping up restructuring to lift productivity and cost efficiency,” she said.

“At the same time, demand remains firm for roles that enable business transformation, including digitalisation, operations optimisation and sustainability, as these capabilities directly support competitiveness. 

“More firms are shifting away from blunt cost-cutting towards job redesign and skills upgrading, so they can sustain output with leaner teams,” Ms Ng added.

Meanwhile, the resident long-term unemployment rate – those jobless for at least 25 weeks – held steady from September 2025 at 0.9 per cent.

There were more retrenchments in 2025, at 14,490, compared with 13,020 in 2024. Residents formed the majority of all retrenched employees, at 73.7 per cent in 2025.

Similarly, the number of employees placed on a shorter work week or temporary layoff increased from 2,210 in 2024 to 2,950 in 2025.

On a quarterly basis, the number of retrenchments crept up slightly from 3,670 in the July-September quarter to 3,690 in the October-December quarter.

MOM noted that in 2025, sectors with relatively higher retrenchments, such as financial services, with 2,240, and professional services, with 1,900, also recorded relatively higher professionals, managers, executives and technicians (PMET) job vacancies.

The overlap suggests that while some jobs are being displaced as firms restructure, hiring continues for other roles, said MOM.

“Overall, this points to ongoing restructuring and skills transitions rather than a contraction in demand for PMET roles,” it added.

OCBC Bank chief economist Selena Ling said the overlap between higher retrenchments and more PMET vacancies in these services suggests a “mixed bag”.

“While some roles are being displaced as firms restructure, hiring continues in others,” she said.

“Hence, there is an ongoing restructuring and skills transition rather than a demand contraction in PMET roles.”

Among retrenched residents, the rate of re-entry into employment six months post-retrenchment rose slightly, from 55.4 per cent in the third quarter to 57.4 per cent in the fourth quarter.

On the outlook for the labour market in 2026, MOM said firms are expected to remain cautious in their hiring and wage decisions in the first quarter of 2026.

“When polled in December 2025, the proportion of firms expecting to hire or raise wages in the next three months remained modest,” it said.

“Early indications in January 2026 suggest a pick-up in hiring and wage expectations,” it added, without giving specifics.

Retrenchments are expected to edge up in some outward-oriented sectors such as information and communications, manufacturing, and financial and insurance services, but remain within non-recessionary levels. These businesses tend to be reliant on global demand and trade.

MOM said resident employment for the whole of 2026 is expected to grow at a similar or slightly slower pace than in 2025, given Singapore’s limited scope for further expansion due to its already high labour force participation rate.

Non-resident employment growth is therefore likely to continue outpacing resident employment growth.

Unemployment rates are expected to remain low and stable throughout 2026, it added.