Commentary: What happens after retrenchment may matter more than the headline number
How quickly displaced workers find another job, and what happens to their earnings afterwards, may offer a fuller picture of Singapore’s labour market adjustment, says NTU’s Chua Yeow Hwee.
Singapore recorded 4,620 retrenchments in the second quarter of 2026, the highest quarterly total since early 2021. However, this figure alone does not paint the full picture of Singapore's labour market adjustment. The key is what happens to displaced workers after they lose their jobs.
Among retrenched residents, 54.9 per cent returned to employment within six months in the second quarter - a decline from 60.7 per cent the previous quarter. This suggests some workers take longer to secure new jobs, even as overall employment increased by 11,400 in the same period.
The slowdown in re-entry is partly due to uneven employment opportunities. Many of the new jobs created came from non-residents, mainly work permit holders in construction and manufacturing, sectors where skilled professionals may face limited opportunities. Resident employment grew modestly, mostly in domestic sectors, but this came alongside retrenchments.
Some retrenched workers face a trade-off between returning to work quickly and seeking a role that matches their previous responsibilities, seniority or pay. Finding a suitable job may take time, as job vacancies in certain high-demand sectors fell from 73,300 to 68,600.
The speed of re-employment does not fully capture the economic impact of retrenchment. While a worker may find a new job, the lower earnings compared to their previous salary can be significant. Workers may need help finding suitable vacancies or additional training to transition into new roles or sectors. Singapore already offers career support measures, but more could be done to help workers navigate these changes.
Overall, while some job losses and a slower re-entry rate are expected in a dynamic economy, the extent of the economic loss and the challenges faced by displaced workers deserve closer attention. Tracking both the speed of re-entry and the earnings of returning workers will provide a more complete picture of Singapore's labour market adjustment.
Written by urgent.news from CNA - Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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