Retrenchments in S’pore doubled in Q4 of 2022, but fewer jobs cut in tech than expected

The 6,440 total retrenchments in 2022 remained low compared to the over 10,000 seen in the pre-pandemic years. ST PHOTO: NG SOR LUAN

SINGAPORE – Despite total employment returning to pre-pandemic levels, the number of retrenchments in the fourth quarter between October and December 2022 doubled to 2,990 from the 1,300 in the third quarter.

However, fewer jobs were cut in the second half of 2022 – 890 – than expected in the information and communications sector, which covers technology firms.

Minister for Manpower Tan See Leng told Parliament last November that firms in the sector had reported 1,270 layoffs within 4½ months from July 2022. The earlier figure was derived from mandatory retrenchment notifications that firms could submit ahead of planned job cuts, a Ministry of Manpower (MOM) spokesman said on Wednesday at a briefing on the finalised Q4 labour market report.

“There will be some differences because there are some retrenchments that didn’t take place, (and) there are some retrenchments that could have happened but were not captured in the earlier notifications,” the spokesman added.

Electronics manufacturing (670), wholesale trade (450) and information and communications (370) were among sectors that contributed the most to the 2,990 jobs cut in Q4.

More workers were retrenched in the second half of 2022 than in the first half. High-profile tech employers, including Facebook parent firm Meta and ride-hailing giant GoTo, had to prune costs amid a volatile global environment and after overexpanding during Covid-19.

Business restructuring was the most common reason cited for the cuts in Q4.

The 6,440 total retrenchments in 2022 remained low compared with the pre-pandemic years of 2018 and 2019, when more than 10,000 jobs were eliminated each year, MOM said.

Furthermore, the percentage of retrenched residents, comprising Singaporeans and permanent residents, who found employment rose to 73.1 per cent in Q4, the highest since Q2 2015.

The report also noted that Singapore saw total employment rise by 227,800 in 2022. This is the highest level of growth seen since comparable annual records began in 1991, surpassing the previous record high in 2007, when total employment grew by 223,500.

Total employment is now 2.9 per cent above the pre-pandemic 2019 level, said MOM.

Its report also showed that resident employment continued to expand, increasing by 26,300 in 2022. The rise is higher than that in 2019, and was mostly in sectors such as financial services as well as information and communications.

Non-resident employment contributed the bulk of the growth in total employment at 201,600, although it has yet to reach its 2019 level. The MOM spokesman said this was because employers continued to fill a backlog in positions for work permit holders in construction and manufacturing after border controls were significantly relaxed in April 2022.

“If we look at the height of the pandemic, many of the foreign workers vacated their positions and went home, so foreign employment levels actually came down a lot, (while) local employment levels were quite steady.”

The unemployment rate in 2022 improved from 2021, with the rate for residents declining to 2.9 per cent from 3.5 per cent. The corresponding figure for Singaporeans also dropped from 3.7 per cent to 3 per cent.

As a whole, unemployment fell to 2.1 per cent of the total workforce, compared with 2.7 per cent in 2021. With this, the unemployment rate across all three categories has fallen below the average in 2018 and 2019, said the ministry.

Also below the pre-pandemic average in the same period was the long-term unemployment rate of residents, at 0.6 per cent.

Meanwhile, the number of job vacancies continued to dip for the third consecutive quarter in Q4 2022, but remained elevated at 104,500.

The backfilling of vacancies for foreign workers and consistent resident employment growth in tech and financial services were two factors behind the strong rebound seen over 2022, Dr Tan said on Wednesday.

He was speaking to reporters during a visit to facilities management social enterprise Agape Services’ Woods Square office to observe its progress in automation and upskilling since it began sending staff to Workforce Singapore’s career conversion programme for facilities management specialists, which was launched in July 2022.

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Asked if the strong jobs growth would persist, Dr Tan said: “We are actually quite guarded, simply because of the fact that the geopolitical tension doesn’t seem to have any signs of abating.”

“We are keeping our eyes and ears very, very peeled to the ground to see, notwithstanding all of the volatilities, which are the pockets where potentially there is huge growth,” he added, citing prospects in sustainability reporting and green energy storage as examples the Government will support businesses to innovate in.

Although hiring sentiments remained positive as at December 2022, slower economic growth may impact labour demand moving forward, he said. “So, employment growth is likely to decrease in the upcoming quarters, and it will be uneven across different sectors.”

Domestically, aviation and tourism-related sectors, such as air transport and accommodation, are expected to continue to benefit from the recovery in air travel and inbound tourism, backed by the relaxation of China’s border restrictions, MOM said.

“On the other hand, the growth outlook for outward-oriented sectors like manufacturing remains weak given the broader slowdown in the global economy,” it added.

This article has been edited for accuracy.

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