SINGAPORE - Retrenchments more than doubled to 8,130 in the three months to end-June, compared with the first quarter of the year, as unemployment climbed further, according to Ministry of Manpower (MOM) data released on Monday (Sept 14).
Retrenchments were sharply higher than the preliminary estimate of 6,700 released in July, as well as the first quarter figure of 3,220. The second-quarter layoffs brought the total number of job losses to 11,350 in the first half of the year.
Retrenchments in the second quarter were above the peak during the 2003 severe acute respiratory syndrome (Sars) period, but below other recessionary highs such as during the 2009 global financial crisis. Wholesale trade, non-electronics manufacturing and financial services had the biggest spike in layoffs.
The latest figure does not include the large-scale layoffs announced by Resorts World Sentosa in July and Singapore Airlines last week which affected thousands of workers.
Locals, which refer to Singaporeans and permanent residents (PRs), were less likely to be retrenched than foreigners, noted MOM in its report, though locals made up more of the actual number of people laid off because they comprise the bulk of the workforce.
National Trades Union Congress assistant secretary-general Patrick Tay said on Monday that the retrenchment figures reported do not include older workers who were not re-employed, foreigners whose work passes are not renewed and workers who may have left their jobs as their employers are facing impending liquidation or insolvency.
“I expect both retrenchment and unemployment figures to continue to increase in Q3 and Q4 especially with continued restricted travel, Covid-19 safe management measures and restrictions, as well as an overall uncertain local and global outlook and stance across many industries,” he said on Facebook.
It could have been worse – the ministry said in a statement that cost-saving measures adopted by firms and Government support initiatives “may have cushioned the overall impact on jobs”.
The number of employees placed on shorter work weeks or temporary layoffs rose to an unprecedented high of 81,720 in the second quarter, as firms battled fallout from the Covid-19 pandemic.
The previous peak was during the global financial crisis in 2009, when 26,530 employees were on such arrangements.
In the first half of the year, locals formed the bulk of the 42,190 employees on short work weeks, while foreigners were the majority of the 43,720 on temporary layoffs, said the ministry in its labour market report.
Unemployment rose steadily over the last few months. The seasonally-adjusted unemployment rate for Singaporeans climbed to 4.3 per cent in July, up from 4 per cent in June and 3.5 per cent in March.
MOM said that it will start to release unemployment rates on a monthly basis, instead of quarterly. This way, it can detect shifts in the employment situation more quickly. It had started collecting unemployment data monthly since April.
The data will be available online and in the jobs situation reports.
In July, the seasonally-adjusted unemployment rate for locals rose to 4.1 per cent, up from 3.8 per cent in June and 3.3 per cent in March, while the overall rate – for locals and foreigners combined – rose to 3 per cent in July, up from 2.8 per cent in June and 2.4 per cent in March.
The latest figures were the highest since the global financial crisis in 2009.
They come amid ongoing uncertainties in the global economy, including the risk of a major resurgence in Covid-19 infections, said MOM. “Softness in the labour market is likely to persist with continued weakness in hiring and pressure on companies to retrench,” it said.
A total of 78,800 citizens and 10,900 PRs were unemployedas of June. Most of them had joined the pool of unemployed recently, while the number of long-term unemployed locals dipped between March and June. This refers to the share of unemployed people who were out of work for at least 25 weeks.
Time-related underemployment rose among locals, as there were more part-timers who were willing and available to work additional hours.
Also, as a result of less overtime, the average weekly total paid hours worked per employee fell by 1 hour between March and June, the largest quarterly decline on record.
SOME SECTORS STILL HIRING
The economy shed a net 103,500 workers in the second quarter of this year, excluding foreign domestic workers. This was the largest quarterly contraction on record, though lower than the preliminary estimate of 121,800.
An MOM spokesman said the difference is because the final report takes into account late responses and revisions in firms’ responses after verifications.
That is also why the final second quarter retrenchment figure was higher than initial estimates.
In all, total employment contracted by 3.7 per cent, or 129,100, in the first half of the year. This comprised 66,400 foreigners, excluding maids, and 62,700 locals.
The bulk of the decline in local employment came from the services sector, while the decline in foreign employment was widespread across sectors.
Bucking the trend, local employment held steady or edged up in sectors such as information and communications, financial and insurance services, health and social services, professional services and electronics manufacturing.
Overall, food and beverage services, construction and manufacturing excluding electronics were the three sectors hardest hit by falling employment. On the other hand, electronics manufacturing and insurance services employed more workers in the second quarter.
Sectors where people are more able to work remotely were least impacted, said MOM.
Hiring demand continued to fall. The seasonally-adjusted ratio of job vacancies to unemployed people in June dropped to 0.57 in June, down from 0.71 in March.
It was the worst showing in a decade, but not as low as in past recessions. For example, the ratio was 0.37 in March 2009 amid the global financial crisis.
Still, job vacancies grew in five sectors between March and June this year: public administration and education (6,200 vacancies as of June), administrative and support services (4,200), food and beverage services (3,200), financial services (4,000) and wholesale trade (3,800).