Singapore’s labour market expanded in the second quarter of 2026 even as retrenchments rose 17.5 per cent to 4,500—the highest level since late 2020. According to preliminary Ministry of Manpower data released on July 31, total employment grew by 10,700 while overall unemployment held steady at 2 per cent.
Second-Quarter Retrenchments Climb to Five-Year High
Layoffs in Singapore reached their highest point in more than five years during the second quarter of 2026, touching a level not seen since the final quarter of 2020. Employers let go of 4,500 workers between April and June, up from 3,830 in the first three months of the year, according to preliminary data released by the Ministry of Manpower on July 31.
The increase pushed the retrenchment incidence from 1.6 per 1,000 employees up to 1.9. Despite the jump, the ministry emphasized that quarterly layoffs remained well below levels typically seen during downturns. By comparison, retrenchments ranged between 5,980 and 12,760 during the global financial crisis and between 5,640 and 9,120 during the pandemic.
Officials pointed to business restructuring within specific outward-oriented industries—notably information and communications and manufacturing—as the primary catalyst behind the 17.5 per cent increase.
Job Growth Continues for the 19th Consecutive Quarter
Even with the rise in corporate layoffs, Singapore’s broader job market expanded for the 19th consecutive quarter. Total employment grew by 10,700 in the second quarter of 2026, up from the 9,400 added in the previous three months and broadly similar to the 10,400 recorded during the same period in 2025.
Underneath those aggregate figures, however, divergent trends emerged between resident and foreign workers. Employment growth for Singapore citizens and permanent residents slowed compared to the first quarter, with hiring concentrated largely in essential and public services.
Meanwhile, overall employment gains were driven predominantly by non-resident workers filling roles in construction and manufacturing. Unemployment rates across the board remained low and stable, with overall and resident unemployment holding at 2 per cent and 2.9 per cent respectively in June, while citizen unemployment ticked down slightly from 3.1 per cent to 3 per cent.
Employer Sentiment Points to Resilient Demand
Forward-looking surveys conducted by the Ministry of Manpower in June reveal that employers plan to keep hiring despite lingering global economic headwinds and rapid technological shifts. The share of organisations expecting to expand their headcounts over the subsequent three months rose to 43.9 per cent in June, climbing from 40.6 per cent in May.
Expectations around compensation followed a similar trajectory. The proportion of firms planning to raise wages increased to 29.3 per cent from 23.7 per cent, while the percentage of employers anticipating further layoffs dropped from 3.2 per cent to 2.7 per cent.
Global Shocks and Cautious Corporate Strategy
Despite the upbeat survey readings, hiring and wage sentiment has not fully returned to where it stood before the energy shock triggered by the Iran war that erupted in late February.
Ministry officials noted that while the rebound in employer optimism was broad-based across sectors, key indicators still languish below their pre-crisis levels from February. That reality suggests businesses will maintain a measured approach toward payroll and compensation adjustments in the immediate future.
Continuous Upskilling Amid Technological Shifts
To navigate ongoing restructuring and external pressure, the Ministry of Manpower urged companies and workers to proactively upgrade their competitive capabilities. With global economic headwinds intersecting with rapid technological change, workforce adaptability remains central as the island nation moves into the second half of 2026.
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