Why Singapore Employees Need To Be Ready For Retrenchment In 2024

Singaporeans Need To Be Ready For Retrenchment

As geopolitical tensions boil over and the global economy cools, businesses may try to stay resilient by prioritising cost-cutting. For many companies, employees are the biggest business expense. 

Moreover, reducing headcount during such uncertain times can also prepare businesses to stay nimble – and go in a new direction more easily when new opportunities arise.

For the rest of 2024, here are 3 reasons why employees need to be ready to lose their jobs – and be prepared to find a new role.

Read Also: Why Singapore Employers Need To Be Prepared For An Older Workforce

#1 Companies Are Retrenching – Potentially Viewing It As  A Path To Sustainability

We’ve been reading about a wave of companies retrenching their employees this year. Some that have made it into the news in Singapore include Shopback letting go 24% of its employeesLazada letting go an estimated 100 peopleUnilever realigning its marketing team in SingaporePropertyGuru laying off 79 employeesTetra Pak closing down in Singapore and 300 employees will be affectedElectrolux relocating its regional HQ from Singapore to Bangkok, and more.

This trend is not unique to Singapore either. Many of the biggest (and possibly smallest) companies globally are also looking to align its workforce with its requirements. They include Amazon to Google to Discord and Twitch.

Read Also: MOM Responsible Retrenchments – Guideline For Companies To Be Fair And Decent

#2 Retrenchment Statistics Are On The Rise

According to the Ministry of Manpower (MOM) the rate of retrenchments more than doubled in 2023. 14,590 workers were retrenched in 2023 compared to 6,440 in 2022.

While more people may be looking for new roles, they will also be hit by a slowdown in job vacancies. In December 2023, the job vacancy to unemployment ratio was 1.74, compared to 2.30 in December 2022.

Read Also: How Singapore’s Labour Market Performed In 2023

As a small and open economy, Singapore has to adhere to global trends to stay relevant. An environment of higher interest rates will inevitably affect global growth – including in Singapore.

With a signal that interest rates may stay elevated for a longer in 2024, investment sentiments may dampen on the back of higher borrowing costs.

At the same time, the post-pandemic explosion in e-commerce has meant that many businesses pivoted into it. Not doing so would be akin to giving up the potential growth. Now, it may be time for companies to relook their initial hires. 

With technology constantly evolving, and potentially more companies jumping on the AI bandwagon now, there may be greater “churn” in the economy – as DPM and Finance Minister Lawrence Wong mentioned in his Singapore Budget 2024 speech.

At the same time, AI and e-commerce are trends that are supposed to eventually lead to fewer headcount – and not more. Once the initial gains have been made, the sensible thing may be to stay lean. 

Read Also: 10 Things Businesses Need To Know About Singapore’s Budget 2024

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