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     FrontPage Edition: Tue 25 Apr 2006

Retrenchment & re-employment 2005



Amid favourable economic conditions, the incidence of retrenchment dropped to a twelve-year low in 2005.
Re-employment also improved for retrenched workers across most age and education groups.
These are the key findings from the report on ¡°Retrenchment and Re-employment, 2005¡± 1 released by the Ministry of Manpower¡¯s Research and Statistics Department.
The report goes beyond the regular reporting in the quarterly labour market publication to examine the incidence of layoffs across different industries and occupational groups. It also analyses the reasons for retrenchment and workers affected by overseas relocation.
The incidence of retrenchment for professionals, managers, executives & technicians (PMETs) dropped to an eight-year low of 8.0 per 1,000 and a thirteen-year low of 4.8 per 1,000 for clerical, sales & service workers.
By occupation, only production & related workers recorded a higher incidence of retrenchment (13 per 1,000) from the previous year (11 per 1,000) as manufacturing saw a rise in layoffs mainly in the electronics industry.
Reflecting the intense cost pressures that manufacturers operate under, the most common reasons for layoffs in manufacturing were high operating costs other than labour costs (50%) and high labour costs (48%).
In contrast, restructuring of business processes for greater work efficiency (52%) and reorganisation of businesses (35%) were the most commonly cited reasons for layoffs in services.
Construction layoffs were attributed to poor business/business failure not due to recession (58%) and recession/downturn in the industry (43%).
The number of workers who were laid off in exercises that involved overseas relocation surged from 1,565 (or 15% of total retrenched) in 2004 to a six-year high of 3,974 (or 39%) in 2005.
This mainly reflected the large-scale retrenchments that took place in the electronics industry as a number of manufacturers moved their assembly line jobs to lower-cost countries to stay competitive. Indeed, the vast majority (94%) of the workers affected by overseas relocation in 2005 were from the manufacturing sector.
In 2005, on average 61% of local2 retrenched workers found re-employment within 6 months of their retrenchment, slightly higher than 59% in 2004. The improvement was more pronounced for the better educated workers.
In particular, the re-employment of locals retrenched from PMET jobs rose from 59% in 2004 to a four-year high of 65% in 2005. Improving from 63% in 2004 to 68% in 2005, clerical, sales & service workers posted the highest annual average re-employment among the three occupational groups for the eighth straight year.
In contrast, the production & related workers were the only occupational group that did not experience an improvement in re-employment rate (55% in 2005 as against 56% in 2004).
For More Information
The report is available online on the Ministry of Manpower¡¯s website at

1 Data in the report pertain to workers retrenched in private sector establishments each with at least 25 employees.

2 Refers to Singapore citizens and permanent residents.


Source: Press Release 24 Apr 2006

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