Growth and Layoffs
Singapore's job market expands for 19th quarter, but retrenchments climb to highest since late 2020.
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Key Points
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Retrenchment incidence rate rose to 1.9 retrenchments per 1,000 employees in 2Q 2026, signaling tighter conditions even as overall employment grew.
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Retrenchments in 2Q 2026 were broken down by sector as 3,500 in services, 800 in manufacturing, and 200 in construction, highlighting which areas were most affected.
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Quarterly retrenchments rose from 3,830 in 1Q 2026 to 4,500 in 2Q 2026, the highest level since Q4 2020, underscoring a spike linked to structural adjustments.
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Forward-looking indicators point to cautious optimism for the next quarter, with 43.9% of firms expecting to hire and 29.3% planning wage increases, while layoff expectations ease to 2.7%.
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CNA reporting includes expert commentary from Dr. Faizal Yahya of the NUS Institute of Policy Studies on why retrenchments can rise even as the job market expands, raising questions about skills mismatches and deeper structural issues.
Singapore's job market kept growing in the second quarter of 2026, adding 10,700 positions — the 19th straight quarter of gains. But retrenchments jumped 17.5% to 4,500, the highest level since the fourth quarter of 2020, according to Ministry of Manpower advance data reported by Staffing Industry Analysts.
The numbers tell a mixed story. Overall unemployment held steady at 2.0%. Yet the retrenchment incidence rate climbed to 1.9 per 1,000 employees, signaling real stress beneath the surface even as hiring pushed forward, HeadTopics reported.
Services and Manufacturing Bear the Brunt of Layoffs
Of the 4,500 retrenchments, 3,500 came from services, 800 from manufacturing, and 200 from construction, according to HeadTopics. The cuts were driven mainly by business restructuring in outward-facing sectors — industries that depend on global trade and demand.
Information and communications was among the hardest hit. These sectors are more exposed to global economic shifts, making them quicker to cut jobs when business conditions change. The spike from 3,830 retrenchments in Q1 to 4,500 in Q2 was steep and fast, Yahoo News Singapore reported.
Job Gains Unevenly Split Between Residents and Non-Residents
Not all workers benefited equally from the 10,700 new jobs. Non-resident employment growth was led by construction and manufacturing. Resident job gains were mostly in essential and public services, according to HeadTopics Malaysia.
That gap matters. Residents getting jobs mainly in public services — rather than the private sector — can point to slower private-sector demand for local workers. Analysts flagged this as a sign of ongoing softness in hiring pace for Singapore residents, even as total numbers rose.
Experts Warn of Skills Mismatches Behind the Numbers
Dr. Faizal Yahya of the NUS Institute of Policy Studies explained why retrenchments can rise even when the job market is growing. The key issue is a skills mismatch — workers losing jobs in restructuring sectors may not have the skills that growing sectors need, CNA reported.
That structural gap is hard to close quickly. Global economic shifts are accelerating change in industries like tech and manufacturing. Workers displaced by those shifts need retraining before they can fill the new roles being created elsewhere. Without that, job growth and job losses can happen at the same time, Hiru News noted.
Forward Signals Point to Cautious Optimism for Q3
Despite the spike in layoffs, companies are signaling more confidence for the months ahead. Some 43.9% of firms said they expect to hire in the next three months. Another 29.3% plan to raise wages. Layoff expectations dropped to just 2.7%, according to HeadTopics Malaysia.
The Ministry of Manpower called labour demand resilient. Hiring and wage expectations both improved heading into Q3. But analysts cautioned that global uncertainty and structural pressures have not gone away. The overall trajectory is upward — but the road is uneven.
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