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Retrenchments in Singapore spike in first half of the year, surpassing SARS peak: MOM

Retrenchments in Singapore spike in first half of the year, surpassing SARS peak: MOM

The Singapore city skyline as seen from Jubilee Bridge (Photo: Jeremy Long)

SINGAPORE: Retrenchments in the second quarter more than doubled to 8,130 from the first quarter figure of 3,220, according to data released by the Ministry of Manpower (MOM) on Monday (Sep 14).

The Q2 figures are also sharply higher than the preliminary estimate of 6,700 retrenchments between April and June.

This brings the total number of retrenchments in the first half of the year to 11,350 - higher than the 10,120 recorded during the SARS period but still lower than other recessionary peaks, said MOM.

The number of people placed on shorter work weeks or temporary layoffs in Q2 also rose to an unprecedented high of 81,720 compared to 4,190 in the first quarter.

The six-month re-entry rate among retrenched residents in the second quarter fell to a record low of 58 per cent.

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Locals formed the bulk of the retrenched employees in the first half of this year at 6,460, but this was due to their larger workforce size, MOM said in its report. 

However, the rate of local retrenchments (4.9 locals retrenched per 1,000 local employees) was lower than the rate of retrenched foreigners (6.2 foreigners retrenched per 1,000 foreign employees).

MOM said the rise in retrenchments over the quarter was widespread, but more were found in outward-oriented sectors like wholesale trade, manufacturing - mostly transport equipment producers - and financial services. 

Among locals who were retrenched, half were in non-professional, manager, executive and technician (PMET) roles. 

"Relating the number of retrenched non-PMETs to their workforce size, the incidence of retrenchments among local non-PMETs rose sharply in 2Q2020," MOM said.

"Non-PMETs were also more prone to retrenchments than PMETs, as industries severely affected by the COVID-19 pandemic typically have larger concentration of non-PMETs," it added. 

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Total employment, excluding foreign domestic workers, contracted by 129,100 in the first half of 2020 - the largest half-yearly reduction on record.

Foreign employment fell by 5.7 per cent, or -66,400, which was sharper than the 2.7 per cent decline, or -62,700, in local employment. 

Most of the foreign employment cuts were among holders of work permit and other work passes (-51,100), followed by S Passes (-11,200) and Employment Passes (-4,100). 

Excluding work pass holders from the construction, marine shipyard and process industries, the decline in work permit and other work passes was -32,900 in the first half of this year.

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Foreign cutbacks were also more widespread across industries, based on the employment diffusion index, which recorded 38.4 for locals and 16.8 for foreigners. 

The metric measures how widespread the employment change across industries is.

A diffusion index of more than 50 means there were more industries that added jobs than those that shed positions. A figure below that indicates that more industries cut jobs than those that increased their headcount. 

The further away the number is from 50, the more widespread the employment change is across industries.


Seasonally adjusted jobless rates have crept up over the past few months, hitting 4.0 per cent among citizens, 3.8 per cent among residents and 2.8 per cent overall in June. 

In July, it climbed to 4.3 per cent among citizens, 4.1 per cent among residents and 3.0 per cent overall.

This is still below previous recessionary highs when the overall unemployment rate reached 3.3 per cent in September 2009 and 4.8 per cent in September 2003. 

A retail assistant cleans the shutters in Singapore on Jun 19, 2020. (Photo: Reuters/Edgar Su) A retail assistant cleans the shop shutter as a shop is prepares to be opened in Singapore as the city state reopens the economy amid the coronavirus disease (COVID-19) outbreak, June 19, 2020. REUTERS/Edgar Su

MOM said this is the first time it is releasing seasonally adjusted monthly unemployment rates and it will do so in the future.

The increase in the resident unemployment rate was due to a rise in the number of short-term unemployed people, MOM said, as the seasonally adjusted resident long-term unemployment rate dipped in June from 0.9 per cent to 0.8 per cent. 

A total of 89,700 residents were unemployed in June, compared to 76,200 in March. 

Resident unemployment rose across all age and education groups, MOM said, but it was higher than average among those aged below 30 (7.3 per cent), 60 and over (4.1 per cent), and among residents with secondary (3.9 per cent), post-secondary (non-tertiary) (4.9 per cent), and diploma and professional qualifications (5.5 per cent). 

By comparison, the resident jobless rate among degree holders was 3.2 per cent in June.


Fewer job vacancies were also available, from 46,300 in March to 42,400 in June, while the seasonally adjusted ratio of job vacancies to unemployed persons fell from 0.7 in March to 0.57 in June. 

However, job vacancies the last quarter rose in sectors like financial services, public administration and education, MOM said. 

File photo of Singapore skyline. (Photo: AFP/Roslan Rahman) Singapore's economy is headed for recession AFP/ROSLAN RAHMAN

Labour turnover was also at its most muted in the second quarter as employers deferred hiring and employees were less likely to quit their jobs, MOM noted in its report. The seasonally adjusted recruitment rate and the resignation rate were just 1.1 per cent and 1.2 per cent respectively.

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The ministry added that with continued uncertainties in the global economy as well as subdued external demand, the labour market will continue to be weighed down in the second half of this year. 

It noted that the Ministry of Trade and Industry has projected that Singapore’s GDP in 2020 will contract by between 5 per cent and 7 per cent. 

“Softness in the labour market is likely to persist with continued weakness in hiring and pressure on companies to retrench,” it said. 


While the impact of COVID-19 rippled across all industries, the hardest-hit sectors typically relied more on non-PMETs workers, resulting in comparatively weaker labour market outcomes for this group in the second quarter, MOM said.

Industries most affected include consumer-facing and tourism-related ones, such as manufacturing, wholesale and retail trade, accommodation and food services.

The least affected sectors include electronics manufacturing, as well as industries that provided essential services or where remote working was more possible, such as information and communications, public administration and healthcare.

In terms of employment, the impact was greater for sectors worst-hit by the circuit breaker and safe distancing measures. Compared to the first quarter, employment in construction (-13,600), food and beverage services (-22,900), as well as administrative and support services (-7,600) all declined sharply.

Weak external demand also resulted in a significant contraction in employment in front-facing sectors like wholesale trade (-7,900) and manufacturing (-8,900).

Even sectors that were relatively stable during the period saw employment fall since March, although by a smaller proportion. These include information and communications (-700), financial and insurance services (-700) and health and social services (-1,400). 

Only the electronics manufacturing and insurance services sectors saw employment go up, by 1,000 and 100 respectively. 

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Source: CNA/rp(gs)


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