Singapore layoffs climb to 5-year high in Q2

In the second quarter, Singapore saw a significant increase in layoffs, reaching a five-year high. This rise, reported by the Ministry of Manpower, saw a 17% increase from the previous quarter and marked the highest figure since 5,640 layoffs in the final quarter of 2020. The surge was primarily driven by business restructuring in sectors such as information and communications and manufacturing, which are more vulnerable to external factors like geopolitical tensions, trade policy changes, and global economic fluctuations.

The trend was noted by Foo See Yang, managing director of Persol Asia-Pacific, who explained that ongoing uncertainty has led many businesses in these sectors to reassess their operations, leading to workforce rationalisation. Despite the increase, the ministry reported that layoffs were lower than during the 2009 Global Financial Crisis and the Covid-19 pandemic.

The city-state's broader labor market remained robust, with overall employment increasing by 10,700 and the unemployment rate staying at 2%. Singapore's economy expanded by 5.7% year-on-year, slightly slower than the previous quarter but ahead of the government's forecast. This strong performance has encouraged economists to revise their 2026 growth projections upwards.

The ministry observed an improvement in labor market expectations in June, with 43.9% of surveyed businesses planning to hire in the next three months, up from 40.6% in May, while 29.3% expected to raise wages, up from 23.7%. Conversely, the percentage of firms anticipating layoffs decreased to 2.7%, down from 3.2%, indicating resilient labor demand despite expectations remaining below pre-energy crisis levels.