Degree holders and older workers hit hardest as Singapore retrenchments rise in Q1: MOM

At the same time, Singapore also saw a decline in job vacancies

Singapore’s job market weakened in Q1 2026 as vacancies fell and retrenchments hit their highest level since Q3 2023.

Retrenchments rose to 3,830 in Q1 2026, up from 3,690 in Q4 2025, according to the Ministry of Manpower’s (MOM) finalised Labour Market Report for Q1 2026.

At the same time, job vacancies fell from 77,700 in Dec 2025 to 73,300 in Mar 2026, down from 80,100 a year earlier.

Degree holders & older workers hit hardest by retrenchments

By educational qualification, the most notable shift was among degree holders, whose retrenchment incidence rose sharply from 2.6 in Q4 2025 to 3.1 per 1,000 resident employees in Q1 2026—the highest among all qualification groups.

MOM said that this reflects ongoing restructuring in the professional and knowledge-intensive sectors.

In contrast, retrenchment incidence was 0.7 per 1,000 resident employees for those with secondary school qualifications or lower, and 1.1 per 1,000 resident employees for those with diploma and professional qualifications.

Across age groups, older workers aged 50 to 59 were the hardest hit by layoffs, rising from 2.8 last quarter to 3.1 per 1,000 resident employees in Mar. The 40 to 49 cohort declined from 2.5 to 2.3, while younger workers aged below 30 continued to record the lowest incidence at 0.8.

Demand remains strong for specialised talent

Meanwhile, MOM said the overall decline in job vacancies was largely driven by fewer openings for non-professional roles.

The demand for skilled workers remained resilient, leading to an increase in vacancies for professionals, managers, executives and technicians (PMETs).

Financial services was one of the sectors that saw the strongest growth in hiring demand for PMET roles, with job vacancies rising from 4,300 in the previous quarter to 5,800 in March 2026.

The figures suggest that while employers are becoming more cautious about expanding their workforce, demand remains strong for specialised and higher-skilled talent.

Slower employment growth

Despite the rise in retrenchments from Jan to Mar 2026, the labour market still kept expanding—just at a slower pace than the previous quarter.

Total employment grew by 9,400 in Q1 2026, slower than the 17,700 increase in Q4 2025.

“I know many Singaporeans are concerned about the economy, the global uncertainty and what AI means for their jobs,” said Manpower Minister Tan See Leng.

“These are very real concerns. We understand the challenges that many workers and many fresh graduates have faced, but I want to reassure everyone that even amidst these uncertainties, there are some encouraging signs in the labour market.”

He noted resident employment growth accelerated from 3,100 in Q4 2025 to 5,400 in Q1 2026.

The gains were concentrated in administrative and support services—employment activities, travel-related services, and roles like customer service, admin clerks, and travel agency clerks. Resident employment also rose in transportation and storage, and public administration.

Despite financial institutions hiring more, resident employment in financial and insurance services shrank, driven by a drop in self-employed workers. “Firms may be prioritising leaner but permanent headcount, while workers gravitate towards stability amid uncertainty,” said MOM.

Overall, MOM emphasised that the rise in layoffs was largely driven by restructuring or reorganisation, rather than cost-cutting. Retrenchments concentrated in outward-facing sectors such as manufacturing, financial services, and professional services.

Rate of retrenched residents returning to employment within 6 months has increased

MOM also added that labour market outcomes remained resilient. The rate of residents returning to employment within six months of retrenchment improved to 60.7%, up from 57.4% in the previous quarter.

“Improvements were observed among PMETs, degree holders and younger residents aged below 30, suggesting that retrenched workers continued to find employment within a reasonable timeframe,” said the ministry.

More employers turned to shorter work weeks or temporary layoffs to avoid retrenchments—1,230 employees were on this arrangement in Q1 2026, up from 960 in Q4 2025. The increase was sharpest in construction and manufacturing, and among production and transport operators, cleaners, and labourers.

These interim measures typically signal economic slowdown, but MOM has said they are preferable to retrenchment, as they preserve employee benefits and signal company commitment.

The ministry said that, “with retrenchment levels remaining low and vacancies robust,” this uptrend “reflects firms’ increased use of reduced working hours to absorb temporary changes in manpower demand rather than retrench workers.”

Moreover, MOM said unemployment rates in Mar remained low and stable—at 2% overall, 2.9% for residents and 3.1% for citizens. The resident long-term unemployment rate held steady at 0.9%.

AI’s impact on Singapore’s labour market

For the first time, MOM’s quarterly labour market report addressed the impact of AI on the workforce, by incorporating data first released in a detailed Apr report.

“AI will indeed change the way we work, but what we are seeing so far is that it’s actually helping to reshape jobs more than replace them,” said Dr. Tan.

The Apr data showed that among firms implementing or piloting AI, 6.2% reported headcount reductions and 8.5% reported lower hiring.

After adopting AI, it was more common for firms to redesign job functions, with 18.9% of respondents doing so.

Dr. Tan also highlighted positive worker experiences, with about 85% of AI users reporting gains in productivity, time savings, and work quality.

“This is exactly why helping workers to pick up new skills and adapt to changing job requirements matters so much as more companies adopt AI,” he said.

So far, only 28.5% of companies in Singapore have adopted the technology.

Adoption rates vary by sector, running highest in digitally intensive, knowledge-based industries like information and communications, professional services, and financial and insurance services.

He said the government will continue providing support, pointing to roughly 400 people who moved through Workforce Singapore’s career conversion programmes in 2025—training for redesigned roles, including those with AI components.

Historical low resignation rates

The ministry also flagged record-low resignation rates, linking them to worker caution amid global uncertainty.

The average monthly resignation rate of 1% in Q1 2026 is a historical low, while the financial and insurance services sector recorded its lowest-ever resignation rate of 0.6%.

Even high-turnover sectors saw workers staying put. Food and beverage services resignation rates fell to 1.8%, retail trade to 1.4%—both multi-year lows.

The average monthly recruitment rate of 1.6% is also among the lowest in years, said MOM.

The ministry expects the labour market to stay resilient, though firms may turn more cautious on hiring and wage increases amid global economic uncertainty and geopolitical tensions.

“Labour demand is likely to moderate if external conditions weaken further and elevated global input costs persist,” it added.

• Read other articles we’ve written on Singapore’s current affairs here.

Also Read: Fewer than 2 in 5 S’pore employers plan to hire in the next 3 months. Here’s who’s still recruiting.

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