Hiring freezes, layoffs to rise in 2026 as 72% of employers report uncertain business outlook

The report gathered responses from about 240 employers representing more than 120,000 workers. It found that 72% of employers faced uncertain business prospects in 2025, up sharply from 58% the year before. 

This gloomier outlook is translating directly into hiring plans. Fifty-eight per cent of employers intend to freeze headcount next year, compared with 50% in 2024. 

Smaller companies were even more cautious, with 63% planning a freeze. The proportion of employers intending to reduce headcount, 8% overall, held steady, though large organisations were more inclined to cut staff. 

The wage outlook has also become more conservative. Nearly half of the employers (48%) plan to moderate wages or impose a wage freeze for the 2025/2026 financial year, marking a 10-percentage-point rise from last year. 

“Employers are navigating 2026 cautiously, in view of rising costs of doing business and uncertainties in the overall global economy,” said SNEF CEO Hao Shuo. 

“However, it is heartening to see that many employers continue to invest in their people, especially lower-wage workers.” Despite the caution, the survey revealed a strong commitment to uplifting lower-income employees. 

Ninety-six per cent of employers that hire lower-wage workers plan to give them built-in wage increases, with nearly four in 10 intending to grant proportionally higher increments compared to other staff. 

Another top concern that continues is rising manpower costs, with 79% of employers saying this remains unchanged from last year. Other key challenges include: 

To cope, 62% of employers plan to offer more competitive salary and benefits packages, though this is down from 70% in 2024. Companies also intend to upskill or reskill employees (45%), while interest in flexible work arrangements has diminished significantly, from 49% last year to just 30% for 2025. 

The findings echo sentiments in a recent Singapore Business Federation poll, where companies called for more government support to address manpower constraints ahead of Budget 2026. 

SNEF urged employers to align wage decisions with the latest National Wages Council guidelines to ensure adjustments remain “fair and sustainable.” 

As Singapore heads into 2026, the picture is one of caution rather than contraction: companies are slowing expansion, moderating pay, and grappling with talent shortages, but continue to invest where it matters most, particularly in supporting lower-wage workers. 

A recent report showed that Singapore’s hiring landscape softened further in October, extending a three-year downward trend in job postings even as employers continue to operate in a relatively tight labour market. Job ads fell another 3.1% during the month, marking the eighth decline this year, with overall postings now 17.9% lower than the same period in 2024.