Retrenchments spike as unemployment rises steadily

The labour market is starting to feel the full force of the Covid-19 pandemic, with retrenchments and unemployment rising in the second quarter of the year.

Amid ongoing uncertainties, observers said the labour market is likely to remain weak for some time to come.

Retrenchments in the three months to end-June more than doubled to 8,130 compared with the first quarter, the Ministry of Manpower (MOM) said on Monday. In all, 11,350 people were laid off in the first half of the year, making it the worst showing since the global financial crisis of 2009.

The figure does not include the large-scale layoffs announced by Resorts World Sentosa in July and Singapore Airlines last week.

Locals - referring to Singaporeans and permanent residents - were less likely to be retrenched than foreigners, noted MOM. Locals still accounted for a majority of those laid off because they make up the bulk of the workforce.

Analysts expect unemployment to climb further as layoffs continue through the rest of the year.

"Retrenchments will likely continue in the third quarter but may not be as massive as in the second quarter when the circuit breaker measures were imposed," said Maybank Kim Eng senior economist Chua Hak Bin.

MOM said that cost-saving measures adopted by firms and government support initiatives may have cushioned the 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.

Locals formed the bulk of the employees on short work weeks, while foreigners formed the majority of the workers on temporary layoffs.

Meanwhile, 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.

The rate for locals was 4.1 per cent in July, while the overall rate including foreigners was 3 per cent.

Meanwhile, the economy shed a net 103,500 workers in the second quarter, excluding foreign domestic workers. This was the largest quarterly contraction on record, though lower than the preliminary estimate of 121,800.

The Straits Times

 
 
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