Retrenchments in Singapore up in the first quarter

The number of retrenchments rose in the first quarter of this year, with the majority of those retrenched being 40 years old and above.

The tightening of the market was driven by manufacturing losses and hit mainly production and related workers from electronics, said the Ministry of Manpower (MOM) yesterday.

According to MOM's labour market report, the number of retrenched employees was 3,230, up from 2,510 in the previous quarter and also higher than a year ago.

The retrenchments in the electronics sector formed a bulk of the total number, at 18 per cent, followed by services industries such as wholesale trade at 16 per cent and transportation and storage at 10 per cent.

MOM said in its report: "While restructuring and reorganisation remained the main reason cited by establishments for retrenchments, there was a rise in the share of retrenchments from the previous quarter due to high costs and downturn in the industry."

It added that among retrenched residents, professionals, managers, executives and technicians (PMETs) continued to make up the majority at 69 per cent.

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This is because they form a higher share of the workforce and were more prone to retrenchments, MOM said.

Job vacancies also dropped for the first time in two years, leading economists to believe this marks a turn in the employment cycle, with the labour market turning soft. In the first quarter, total employment rose by 10,700, excluding foreign domestic workers, driven by the services sector.

But employment dipped in manufacturing for the second consecutive quarter, led by cutbacks in electronics, which posted its largest employment contraction in six years.

In a Facebook post in response to the report, Mr Patrick Tay, assistant secretary-general of the National Trades Union Congress, said: "While retrenchments have been... lower in 2018, the figures in the first quarter hint at retrenchments picking up.

"We need to continue to pay close watch to figures in the upcoming quarters and expect to see fluctuations from quarter to quarter, especially with the continued US-China trade tensions."

Speaking to The New Paper, Mr Tay added that it is important to keep a close eye on both the economy and labour market in the second quarter of this year to get a better sense of the extent of the impact the trade tensions have on Singapore.

He added: "There is an overall air of uncertainty of what lies ahead, and companies are more likely to be more conservative. Everyone is watching the US-China space."

Mr Tay said that because there are many American companies in Singapore, particularly in the manufacturing sector, the trade dispute could affect us.

Mr Irvin Seah, senior economist at DBS Group Research, said it looks more likely than not that the retrenchment numbers will continue to increase.

He, like Mr Tay, said that due to factors such as the US-China trade war, the sense of uncertainty among employers in Singapore could lead to more conservative hiring practices.

Mr Seah said that this slowdown in growth, both in the Gross Domestic Product (GDP) and labour market, has been some time coming.

He said that the market had been showing signs of slowing in 2018, due, in large part, to the risks and uncertainties of the global market.

Ms Linda Teo, country manager of ManpowerGroup Singapore, said they had not noticed any drastic increase in jobseekers.

She said: "Companies across sectors are cautiously optimistic in their hiring plans due to the uncertain economic outlook."

She and Mr Tay both stressed the importance of ensuring that employees in Singapore remain ready and resilient, and keep themselves employable, by learning new and more relevant skills.