Singapore's Q2 Layoffs Reach 4,620, Highest in Five Years
According to the Ministry of Manpower (MOM) in Singapore, the number of layoffs nationwide in the second quarter reached 4,620, a month-on-month increase of about 20.6% from 3,830 in the first quarter, marking the highest level since Q4 2020 (5,640) and a new high since the peak of the pandemic.
The increase in layoffs is mainly concentrated in export-oriented industries, including manufacturing, information and communication, and financial services. The Ministry attributed the primary cause to business restructuring and structural adjustments by companies, rather than an overall economic recession; the layoff rate rose from 1.6‰ in the previous quarter to 1.9‰.
In contrast to the rise in layoffs, Singapore's overall job market continues to expand—total employment increased by 11,400 in the second quarter, achieving positive growth for 19 consecutive quarters, while local resident employment growth slowed to 2,200, with the unemployment rate remaining stable at 2%.
Indicators for re-employment in the labor market have also weakened— the re-employment rate within six months after layoffs dropped to 54.9%, a significant decline from 60.7% in the previous quarter, while the 12-month re-employment rate remained at 69.8%; this data indicates that even though overall job supply is still growing, the time it takes for the unemployed to find new jobs is lengthening.
The Ministry's July business expectations survey shows a "positive but cautious" outlook—more companies indicated a willingness to hire in the next three months, but the proportion of companies planning to raise salaries has slightly decreased; job vacancies in the financial services and information and communication sectors have also shown a decline, indicating that the structural cooling of the labor market is not limited to layoff data alone.
From a market mechanism perspective, the three sectors most affected by layoffs—manufacturing, information communication, and financial services—are precisely the industries most sensitive to external demand and global capital flows in Singapore. This reflects that global trade frictions, AI-driven organizational restructuring, and changes in the interest rate environment are first being transmitted to Singapore's local job market through these export-oriented sectors, while employment of non-local workers in domestic demand-driven industries like construction continues to grow, highlighting a divergence in economic internal and external dynamics.
Source: Public Information
ABAB AI Insight
Previous peaks in layoffs in Singapore have been directly related to external shocks—such as the pandemic in 2020, which saw quarterly layoffs reach as high as 5,640, and the global wave of layoffs in the tech sector from 2022 to 2023 that also pushed up Singapore's quarterly layoff figures. The current layoffs are concentrated in manufacturing, information communication, and financial services, closely aligning with the timeline of the ongoing AI-driven organizational streamlining in global tech and financial institutions over the past two years.
During the business restructuring process, funds and positions are shifting from traditional operations and back-office support functions to organizational structures with fewer human resources and higher automation levels; meanwhile, Singapore's overall employment and capital inflow have not shrunk, with the number of non-local employees in manufacturing and construction still increasing, indicating that capital is more inclined to flow into job categories with more flexible labor costs and regulations, rather than a complete contraction of investment.
This pattern is similar to the structural layoffs aimed at "cost reduction and efficiency improvement" seen in the financial and tech sectors in Europe and the U.S. over the past two years—companies are not laying off workers due to revenue declines, but are proactively optimizing organizational efficiency and reallocating resources to AI and core businesses; Singapore, as a regional headquarters for financial and tech companies in the Asia-Pacific, is at the downstream end of the global corporate organizational restructuring wave.
Essentially, this is a case of technological substitution—the three impacted sectors of manufacturing, information communication, and financial services are precisely the areas with the highest penetration of automation and AI tools. Companies are reducing the demand for human resources in back-office and certain specialized positions while maintaining or even expanding overall business scale through organizational restructuring, which means that the rise in layoff data can coexist with overall economic expansion. The structural differentiation in the labor market (with some positions being replaced and some fields continuing to recruit) will become the norm for a period of time.
ABAB News · Cognitive Law
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