MOM Report on Redundancies and Re-Employment in 2008

On the Redundancies and Re-employment matters in 2008, MOM has released below facts in its website. It's not a very good news but that's the facts:

Redundancies

Layoffs surged to a record quarterly high affecting 9,410 workers in the fourth quarter of 2008, nearly triple the 3,180 laid off in the preceding quarter¹. For the whole of 2008, redundancies hit 16,880 workers, comprising 13,920 workers retrenched and 2,970 workers whose contracts were terminated prematurely. This translated to 11 workers made redundant for every 1,000 employees, nearly double the 6.0 per 1,000 in 2007. Nevertheless, redundancies in 2008 remained below the highs hit in 1998 during the Asian financial crisis (32,800 or 33 per 1,000) and in the 2001 economic downturn (27,570 or 26 per 1,000)².

More workers across all three broad occupational groups were made redundant in 2008. Professionals, managers, executives and technicians (PMETs) saw a rise in share of redundancies from 31% in 2007 to 37% in 2008, while the share of production & related workers displaced fell from 56% to 52% and clerical, sales & service workers from 13% to 11%. Nevertheless, production & related workers still had the highest incidence of redundancy with 14 workers made redundant per 1,000, followed by PMETs at 9.9 per 1,000 and clerical, sales & service workers at 5.5 per 1,000 in 2008

Redundancies in 2008 rose faster in percentage terms for foreigners (153%) than locals (72%). Although locals formed the majority or 61% of the redundancies in 2008, their share came down from 70% in 2007. Correspondingly, the foreign share of total redundancies rose to a new high³ of 39% in 2008, slightly more than the proportion of foreigners in our workforce which was 36% as at December 2008.

Companies cited the recession/downturn as the top reason for retrenchment in 2008, affecting four in ten (41%) workers retrenched, followed closely by business restructuring (39%). High labour cost (22%) and high operating cost other than labour cost (20%) were other reasons cited. This was unlike in 2007 when the top reasons for retrenchment were the discontinuation of the production line and business reorganization.

Due to the global nature of the current recession, the number of workers retrenched in exercises involving businesses relocating overseas fell from 1,520 in 2007 to a record low⁴ of 1,260 in 2008. They accounted for only 9.1% of workers retrenched in private establishments, compared to 20% in 2007.

Re-employment

Possibly reflecting more realistic expectations given the weak job market outlook, seven in ten (70%) locals retrenched in the third quarter of 2008 were re-employed by December 2008, higher than the 62% recorded by the previous cohort in September 2008, but slightly lower than the 73% in December 2007⁵. The rise was generally felt across the board, with the major exception of degree holders whose re-employment rate fell from 68% to 62%.

Among locals retrenched in the first nine months and re-employed by the end of the year, 56% secured employment in the same industry from which they were retrenched. This was slightly lower than the 58% a year ago.

Mature residents with tertiary education were the most vulnerable groups in 2008 with above-average risk of retrenchment and below-average re-employment. This was unlike the previous downturns when the less educated were the most vulnerable.

The report is available online on the Ministry of Manpower's website. It goes beyond the quarterly reporting to provide additional analysis on the incidence of retrenchment, reasons for retrenchment, retrenching establishments, time taken to secure re-employment and the shift in industry among those re-employed.

---

¹ Data series on redundancies started from Q1 1998 onwards.

² Before 2006, data pertain to private sector establishments each with at least 25 employees. From 2006 onwards, data also include the public sector.

³ Highest since the data series started in 1998.

⁴ Data series on workers retrenched in exercises involving overseas relocation started from 1995 onwards.

⁵ Based on CPF records.