Singapore sees worst-ever quarterly fall in employment in Q2 as retrenchments double: MOM data

The number of workers here plunged by 121,800 in the second quarter, according to preliminary data released by the Ministry of Manpower.
The number of workers here plunged by 121,800 in the second quarter, according to preliminary data released by the Ministry of Manpower.PHOTO: LIANHE ZAOBAO

SINGAPORE - Unemployment and retrenchments surged between April and June, while total employment saw the biggest quarterly fall on record, as the Covid-19 pandemic took a toll on the labour market.

The overall unemployment rate rose to 2.9 per cent in June after taking into account seasonal variations – the highest in just over a decade, and up from 2.4 per cent in March.

The rate for Singaporeans rose to 4 per cent, from 3.5 per cent, and the rate for Singaporeans and permanent residents combined rose to 3.9 per cent, from 3.3 per cent, according to preliminary data released by the Ministry of Manpower (MOM) on Wednesday (July 29).

Still, unemployment remained lower than previous recessionary peaks during the global financial crisis and the Sars outbreak, said the ministry.

The number of unemployed Singaporeans climbed nearly 20 per cent to 79,600 in June, up from 66,900 in March. 

Together with permanent residents, there were a total of 90,500 unemployed residents in June, up from 76,200 in March.

Total employment, excluding foreign domestic workers, plunged by 121,800 in the second quarter.

This is more than four times the fall in the first quarter and means that the economy has shed a net 147,500 workers in the first half of the year.

Retrenchments more than doubled in the second quarter, with 6,700 workers laid off, up from 3,220 in the first quarter.

This was higher than the peak of 5,510 during the 2003 severe acute respiratory syndrome (Sars) outbreak, but lower than the 2009 global financial crisis high of 12,760, said the ministry.

Layoffs rose significantly last quarter in wholesale trade and transport equipment due to lower demand for retail and air travel, MOM said.

Manpower Minister Josephine Teo told the press at a briefing on Wednesday that the contraction in employment was "quite reflective of the workforce composition" in terms of the spread between local and foreign workers, but added that the exact breakdown is not yet available.

She also noted that the jobs situation may not have hit rock bottom yet: “I think it is reasonable for us to adopt a more cautious attitude, and that is to expect that it hasn’t bottomed out. Of course, it all depends on the sentiments amongst the companies in the economy. Some are resuming activities. But even as they resume activities, they may ask the existing staff to perform more responsibilities, rather than to proceed with hiring.”

She added that even for food and beverage establishments that might see consumer demand return, their crowd volumes cannot return to pre-pandemic levels due to safe measures, which will in turn impact hiring. 

“The outlook is still uncertain, and not only within Singapore. Singapore is very plugged into the global economy. When there’s weakness in global demand, companies are likely to be much more cautious,” she said. 

National Trades Union Congress assistant secretary-general Patrick Tay said in a Facebook post on Wednesday that he expects retrenchments and unemployment to worsen further over the rest of the year, due to continued travel restrictions, safe management measures as well as an overall uncertain outlook across many industries. 

Besides small- and medium-sized enterprises, large local enterprises and multinational companies are also impacted with delayed or reduced investments, curtailed production, and freezes in global headcount, he said.

“I am particularly concerned that the figures may not reflect the full impact of [job losses] as I do see and hear of workers being contractually terminated (though with adequate notice pay), older workers not being re-employed, as well as foreign workers on work permit, S Pass and Employment Pass whose passes are not renewed. These do not count towards overall retrenchment numbers.”

 
 
 
 

Within the services sector, the contraction in second-quarter employment was sharpest in food and beverage services; retail trade; arts, entertainment and recreation; and education. Construction also saw a steep drop in employment while manufacturing saw a more modest decline.

Mrs Teo noted that the construction, marine and process industries will need more adjustment as they deal with strict requirements for the resumption of activity on worksites.

“Even when the dormitories and workers are cleared, in order for the companies to be able to resume the activities at the worksite, we want very much to ensure that when they start, it is safe for the workers,” she said. 

She noted that there will be support for them in the future, as the Government looks into foreign worker levies. 

“I want to assure the companies in construction, marine and process industries that we understand what it is that they’re going through, we know very well that they’ve carried the heavier burden on behalf of all of us, and we are very mindful that we will try our best to support them throughout this period of transition.”

To help job seekers, Workforce Singapore is stepping up efforts to make services more accessible, said the statutory board's chief executive Tan Choon Shian.

The SGUnited Jobs and Skills Centres being set up around the island provide career advice and job matching services and have helped 1,300 job seekers since the first batch of eight centres started operating on July 1, said Mr Tan at the briefing, which was held at one of the centres at Kampong Chai Chee Community Club.

Eight more centres will be ready on Saturday (Aug 1), with the remaining eight to be set up by Aug 15 so that all 24 Housing Board towns have a centre.

The agency is also holding virtual career fairs online, setting up SGUnited Jobs and Skills information kiosks in areas with high footfall - the next will be at Elias Mall in Pasir Ris on July 31 - and sending out its roving career centre truck.

The National Jobs Council is also overseeing the implementation of the SGUnited Jobs and Skills Package which will create close to 100,000 jobs, traineeships and training places for job seekers in the next year.

Mrs Teo said that the Government understands that when job seekers are given a “buffet of options”, it can be confusing. 

“We will try to be more focused, we will try to be more specific, and say that ‘perhaps these kinds of opportunities are more relevant and easier for you to get into’,” she said.

Responding to a question on measures in place to ensure retrenchments are carried out fairly, she said that companies should first exhaust all means to retain staff before resorting to retrenchments. 

She said there has also been feedback from employees about not receiving good communication.

This comes after media reports of staff at aircraft maintenance company Eagle Services Asia being told to leave the workplace immediately last week though the company refuted rumours that it retrenched over 140 staff and said it is in negotiations with the unions to find ways to keep as many jobs as possible.

“It is very important in the spirit of tripartism in Singapore, not to act ahead of what has been agreed with the union,” said Mrs Teo.

This means not acting on a retrenchment exercise before negotiations with the union are complete, if a union is involved, of before the employer has properly prepared workers for what is to come, she added.

“The way in which this dreadful process is handled is critical. There has to be an understanding of the pressure that the workers face, there has to be understanding that we need to accord them with dignity and respect,” she said.