Singapore’s labour market holds steady growth, but hiring caution clouds early 2026: MOM report

Singapore’s labour market closed 2025 on a stronger footing than the year before, adding more jobs even as employers signal a more measured approach to hiring in the months ahead. 

Fresh government data suggests that while employment growth remains resilient, businesses are entering 2026 with sharper caution, shaped by restructuring pressures, sectoral shifts, and a still-tight talent landscape.

According to the advance release of the Ministry of Manpower’s (MOM) Labour Market Report, total employment grew by 57,300 in 2025, a marked improvement from the 44,500 jobs added in 2024. The expansion reflects continued economic growth and sustained demand for labour, particularly in essential and high-value sectors.

Resident employment gains were led by Financial Services and Health and Social Services, underscoring Singapore’s push toward knowledge-intensive and care-oriented industries. Meanwhile, non-resident employment growth remained concentrated in Construction, largely comprising Work Permit holders, highlighting the sector’s ongoing reliance on foreign labour amid infrastructure and development needs.

Despite global uncertainties, unemployment remained low and stable throughout the year. By December 2025, the overall unemployment rate stood at 2.0%, with resident unemployment at 2.9% and citizen unemployment at 3.0—levels broadly unchanged from earlier in the year and consistent with the past two years.

Yet beneath these headline numbers, signs of labour market churn are becoming more visible.

The incidence of retrenchments edged higher in 2025, rising to 6.2 retrenchments per 1,000 employees, up from 5.9 in 2024. In absolute terms, 14,400 workers were retrenched over the year. MOM attributed the increase largely to job cuts in Transportation and Storage and Financial Services.

“The increase largely reflects higher retrenchments earlier in the first three quarters of 2025 compared to the preceding year,” the ministry said, adding that “throughout 2025, business reorganisation or restructuring remained the primary reason for retrenchments.”

Importantly, retrenchment levels remained stable in the final quarter of the year. In 4Q 2025, about 3,600 employees were retrenched, similar to the previous quarter, suggesting that cost-cutting measures have not accelerated into widespread job losses.

As Singapore steps into 2026, the labour market is expected to continue expanding, but at a slower and more cautious pace. The share of employers planning to hire in the first quarter of 2026 dipped slightly to 43.3%, down from 44.1% in September 2025. At the same time, a growing proportion of firms, 26.4%, up from 19.3%, expect to raise wages, pointing to continued competition for talent in select roles.

Retrenchment expectations have also ticked up. About 4.3% of employers anticipate job cuts in early 2026, nearly double the previous quarter’s 2.3%, though MOM stressed that the level remains contained.

“It remains low, suggesting selective workforce adjustments rather than broad-based job cuts,” the ministry said.

The cautious outlook aligns with broader employer sentiment. In the latest ManpowerGroup Employment Outlook Survey, only 32% of employers said they plan to increase headcount, while nearly half expect staffing levels to remain unchanged, reflecting a wait-and-watch stance as businesses navigate cost pressures, digital transformation, and shifting demand.

Still, policymakers are framing adaptability, not alarm, as the defining challenge ahead. While the labour market remains tight, MOM urged both employers and workers to continue investing in skills and transformation to stay competitive, pointing to expanded SkillsFuture credits, career conversion programmes, and jobseeker support schemes.

The full Labour Market Report for the fourth quarter of 2025, due in mid-March, is expected to provide deeper insight into sectoral trends, job vacancies, and re-employment outcomes.