Singapore Retrenchments Hit Post-Pandemic High; MOM Weighs Action on Benefits

Singapore’s job market is weakening sharply. Retrenchments jumped to 4,620 in the second quarter of 2026, the highest level since late 2020. More troubling, only 54.9% of retrenched workers found new jobs within six months, down from 60.7% in the first quarter. The Ministry of Manpower is now weighing administrative action against employers who refuse to pay retrenchment benefits despite having the financial capacity to do so.

Retrenchment benefits remain voluntary but under pressure

Retrenchment benefits are not mandated by law in Singapore. Employers follow a tripartite advisory setting the norm at two weeks to one month’s salary per year of service. In 2025, about 88% of employers paid these benefits. Of those who did not, one-fifth cited financial difficulties. The rest cited lack of legal obligation or said they provided alternative support such as keeping employees on payroll longer. Close to 80% of workers who received no retrenchment benefits worked at firms with fewer than 200 employees.

MOM signals tougher enforcement ahead

Acting Manpower Minister Jasmin Lau told Parliament on October 6 that MOM is weighing possible administrative action against employers able but unwilling to pay retrenchment benefits after repeated warnings. Tripartite partners are also considering bringing forward the mandatory retrenchment notification window so affected staff can receive job support earlier. Under current rules, firms with 10 or more employees have up to five working days after notifying staff to inform MOM.

Re-entry rates fall as fresh grads struggle

The re-entry rate for retrenched workers dropped to 54.9% in Q2 2026, down from 60.7% in Q1. Fresh graduates are also taking longer to secure full-time jobs. Of 18,000 fresh graduates from autonomous universities, 3,600 were still seeking employment as of June 2026. For the 2025 cohort, 74.4% of university graduates secured a full-time role within six months, compared with 87.5% in 2022. Retrenched workers finding it harder to land new jobs reflects softer hiring conditions across the economy.

Older workers and PMETs face steeper pay cuts

Retrenched professionals, managers, executives and technicians (PMETs) who return to work often accept lower pay. Among those earning less after retrenchment, the median wage reduction was around 25% of their pre-retrenchment wages. About six in 10 retrenched PMETs earned more than before, but older workers had lower re-entry rates at both 12 and 24-month marks. Those in their 40s and 50s accounted for more than half of all retrenched residents. Degree holders were the largest educational group, rising from 51% in 2021 to 66.4% in 2025.

Final Thoughts

Singapore’s labour market is cooling fast. With retrenchments at a seven-year high and re-entry rates falling, workers face longer jobless spells and steeper pay cuts. The government’s push to enforce retrenchment benefits signals recognition that the burden on workers has become unsustainable.

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