Not every layoff is about AI: 5 forces driving Singapore’s workforce cuts despite employment growth

As companies announce job cuts, artificial intelligence (AI) is increasingly being blamed for the changing employment scenarios. But is technology the primary reason behind workforce reductions? 

Singapore’s recent cases suggest the picture is more complicated, with production requirements, cost pressures, ownership changes and financial distress also influencing decisions.

Ubisoft plans to cut 70 positions at its Singapore studio as it aligns production capacity with upcoming projects. 

Restaurant group Crystal Jade has issued termination notices to around 120 workers as part of a restructuring ahead of a proposed sale.

Meanwhile, True Fitness and True Yoga have ceased operations in Singapore, and advertising technology company The Trade Desk has reduced its global workforce, including employees in Singapore.

Another case, Bakery chain Twelve Cupcakes ceased operations in October 2025, leaving 80 employees unpaid. MOM issued a warning on 1 April 2026, finding that the closure stemmed from severe financial distress rather than deliberate salary non-payment.

These cases point to different business circumstances. While some companies may be aligning their workforce with production requirements, others are reviewing expenditure, preparing for ownership changes or dealing with financial difficulties.

Singapore’s wider employment figures offer a contrasting picture. Total employment grew by 57,300 in 2025, while the employment rate among residents aged 15 and above reached 65.7%. In the second quarter of 2026, employment increased by a further 11,400, marking the 19th consecutive quarter of growth. The overall unemployment rate stood at 1.9%.

The figures highlight an important distinction: employment growth across the economy does not prevent individual businesses from reducing headcount or discontinuing operations. Workforce decisions are often driven by company-specific requirements rather than a single economy-wide trend.

Workforce requirements are closely linked to the volume and nature of work a company expects to undertake. When production plans change, organisations may need to reassess staffing levels and the capabilities required to deliver future projects.

Ubisoft’s decision to align production capacity with upcoming projects highlights how staffing needs can change as project portfolios and business priorities are reviewed.

For companies operating across multiple markets or product lines, workforce requirements may vary according to project timelines, demand forecasts and investment decisions. A team built around previous production needs may no longer reflect the resources required for future work.

The priority is to connect workforce planning with operational forecasts. This involves assessing upcoming projects, identifying critical capabilities and determining whether existing teams are aligned with anticipated workloads.

The challenge is to ensure that workforce decisions reflect actual business requirements, while considering the implications for productivity, continuity and future growth.

Rising operating expenses and pressure on profitability can prompt companies to review how resources are allocated across their businesses.

Workforce expenditure is one component of this assessment. Depending on the company's circumstances, management may review team structures, staffing requirements, operating processes and spending across functions to determine where costs can be controlled without undermining essential operations.

Singapore employers are also facing pressure from rising manpower costs. The Singapore National Employers Federation’s Wage and Employment Outlook Survey 2026/2027 found that 83% of surveyed employers identified rising manpower costs as a challenge, compared with 79% in 2025.

However, this finding reflects a broader employer concern and does not establish that rising manpower costs caused the job cuts at any of the companies mentioned above.

The objective is to understand how workforce expenditure relates to business output and financial performance. 

This requires evaluating whether current staffing arrangements support operational requirements and whether alternative processes or resource allocations could improve efficiency.

Cost reduction alone should not determine the outcome. Decisions also need to account for their potential effects on service quality, institutional knowledge, delivery capacity and the organisation’s ability to pursue future opportunities.

When ownership changes are being considered, management may assess how the business should operate under a future ownership structure. This can involve reviewing existing functions, identifying overlapping responsibilities and determining which activities are essential to the business.

Restaurant group Crystal Jade has issued termination notices as part of a restructuring ahead of a proposed sale. The development illustrates how workforce decisions can occur alongside changes in ownership plans.

However, the precise rationale for the company's workforce decisions should not be assumed without further confirmation. A proposed sale does not, by itself, establish why particular roles are affected.

These situations require careful coordination between financial planning, operational management and workforce decisions. 

Management needs to understand the implications of proposed changes for business continuity, staffing requirements and the organisation’s future operating model.

Clear communication and appropriate planning are also important when decisions affect employees, customers, suppliers and other stakeholders.

Not every company reducing its workforce is preparing for its “next phase of growth”. In some cases, financial distress can leave businesses unable to sustain operations.

The closure of Twelve Cupcakes illustrates the distinction between a planned workforce restructuring and a business that can no longer continue operating.

The bakery chain ceased operations leaving 80 employees unpaid. Following an investigation, MOM determined that the closure resulted from severe financial distress rather than a deliberate attempt to avoid salary payments.

This case highlights how financial difficulties can extend beyond workforce planning to the company's ability to meet its employment obligations.

Monitoring financial health is therefore essential. Cash flow, outstanding liabilities, operating expenditure and revenue performance can provide important indicators of whether a business can sustain its current operations.

When financial distress becomes serious, management must work with relevant legal and insolvency professionals to understand its obligations and manage the closure process appropriately. 

Salary payments and other employment matters must be handled in accordance with applicable requirements.

The case also demonstrates why workforce reductions should not automatically be attributed to AI or technological change. A company may cease operations because of financial circumstances that are unrelated to automation.

Workforce restructuring can also reflect a broader reassessment of where a company intends to invest and how it plans to allocate resources.

The Trade Desk, reduced its global workforce, including employees in Singapore. True Fitness and True Yoga, meanwhile, have ceased operations in Singapore. These developments represent different business circumstances and should not be treated as evidence of a common underlying cause.

For companies continuing to operate, changes in business priorities may prompt management to review which markets, products or functions require investment. Organisations may redirect resources towards selected activities while reducing spending elsewhere.

In other cases, a business may no longer be able to sustain its operations, making closure rather than restructuring the relevant outcome.

The task is to connect workforce decisions with a clear assessment of business priorities. This includes determining which activities are essential, where resources can deliver the greatest value and whether the organisation has the financial and operational capacity to support its plans.

Such assessments need to distinguish between decisions intended to improve an ongoing business and situations in which the business itself is no longer viable. 

The two require different approaches to financial planning, workforce management and stakeholder communication.

Takeaway

Singapore’s employment growth and company-level job cuts are not contradictory. National employment figures reflect the combined performance of businesses across industries, while individual companies make workforce decisions according to their own operating requirements and financial circumstances.

They also show why AI should not automatically be treated as the primary explanation for every round of job cuts. Although technology can change the nature of work and influence staffing decisions, the reasons behind each case need to be assessed using company-specific evidence.

For business leaders, the priority is to make workforce planning part of wider business strategy. 

This could mean monitoring demand, understanding operating costs, assessing financial health and identifying the capabilities required to deliver future objectives.

Ultimately, the number of roles added or removed tells only part of the story. 

Understanding the business decisions behind those changes provides a clearer picture of how companies are managing their resources in Singapore’s growing employment market.