PUBLISHED ONOctober 06, 2026 4:30 AMBYLaili AbdeenActing Minister for Manpower Jasmin Lau said the Ministry of Manpower (MOM) is reviewing worker support measures as retrenchments hit their highest level since 2020, during the COVID-19 pandemic.
MOM's data showed that the number of retrenchments rose to 4,620 in the second quarter of 2026, which is about two retrenched workers per 1,000 employees, up from 3,830 retrenchments in the first quarter.
Based on MOM's Labour Market Report released on Sept 21, the rise was driven by business reorganisation and restructuring in sectors such as manufacturing, information & communications and financial services.
During parliament on Tuesday (Oct 6), Lau said that it is unclear if retrenchments have been driven up by AI adoption.
She said that the impact of AI adoption is difficult to isolate from broader business transformations and reorganisation, adding that the ministry’s surveys found that only a small minority of firms adopting AI have reduced headcounts, with more creating new roles or redesigning jobs.
“We will continue to refine our surveys and market-sensing mechanisms to better understand the impact of AI on jobs,” said Lau.
When asked about whether the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM) has been effective in getting employers to pay retrenchment benefits, Lau said that 88 per cent of employers complied with the advisory and provided retrenchment benefits.
She added that about one in five employers that did not pay retrenchment benefits cited financial difficulties, while the remainder gave other reasons, including providing other forms of support to affected workers.
Yeo Wan Ling also highlighted concerns about workers from non-unionised companies that have the financial means to pay retrenchment benefits but are not legally required to do so.
As part of the ongoing review of the Employment Act, the tripartite partners are studying ways to strengthen support for retrenched workers, including improving compliance with TAMEM.
The tripartite partners comprise the Ministry of Manpower, the National Trades Union Congress and the Singapore National Employers Federation.
"One option we are considering is to take administrative action against employers who do not pay retrenchment benefits in egregious cases where an employer has the financial ability to pay but refuses to, despite repeated engagements and warnings," said Lai.
She added that the Government must balance stronger worker protections with the needs of employers facing genuine financial difficulties.
"The labour market remains resilient, but there are signs of softening," said Lau.
MOM is therefore "comprehensively reviewing" its measures to determine how support for workers can be strengthened.
Her ministry is also looking at how to support workers who face longer transitions back into employment, including older workers and those in sectors undergoing significant restructuring.
Re-entry outcomes have softened, she added, with the proportion of retrenched residents returning to employment within six months declining from 60.7% in the first quarter to 54.9% in the second quarter of this year.
However, Lau stressed that there is no single retrenchment experience. Seven in 10 retrenched PMET residents found jobs within 12 months, while eight in 10 found jobs within 24 months.
Of those who re-entered the workforce, six in 10 earned more than before their retrenchment. Among those who earned less, the median wage reduction was about 25 per cent of their pre-retrenchment wages.
MOM will also investigate and take appropriate action when there are signs of unfair displacement, including looking into possible disguised retrenchments and engaging the employers involved, said the acting minister.
Lau said that the Employment Act is currently under review to address these issues, and MOM will provide an update when the reviews are completed.
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