Workforce Planning
Malaysia cuts foreign workforce by 13% as push for local hiring gains traction
Deputy HR Minister confirms the active foreign workforce fell to 2.13 million, aligning with targets in the 12th Malaysia Plan to limit foreign workers to below 15% of total employment.
Malaysia is seeing a notable correction in its reliance on foreign labour, with the number of active legal migrant workers falling by 13% over the past year. Government data tabled in Parliament this week shows 2.13 million foreign workers currently employed across formal sectors, down from 2.45 million recorded in the same period last year.
Deputy Human Resources Minister Datuk Seri Abdul Rahman Mohamad said the decline reflects ongoing measures to prioritise local talent and tighten quota approvals. “The ministry remains committed to reducing dependence on foreign workers across all sectors of the national economy,” he told lawmakers in the Dewan Rakyat.
Manufacturing and construction remain the two largest employers of foreign workers at 622,000 and 589,000 respectively. Plantations account for 262,000 workers, followed by agriculture (158,000), domestic work (about 100,000) and a small presence in mining and quarrying.
Malaysia’s plan ties back to the goals laid out in the 12th Malaysia Plan, which aims to bring the share of foreign workers down to under 15% of the total workforce by 2025. That target has been a key reference point for the government as it pushes employers to look to local talent first before turning to migrant labour. Under the next planning cycle, the government is aiming for deeper reductions — below 10% by 2030 and down to 5% by 2035. Officials say the freeze on new quota approvals is continuing, with employers required to exhaust local hiring channels before applying for migrant talent.
Industry groups are watching the shift closely. While many industries have welcomed efforts to strengthen local employment pipelines, employers in labour-intensive sectors such as plantations, construction and manufacturing have repeatedly raised concerns about shortages, especially for difficult-to-fill physical and technical roles.
This shift isn’t happening in isolation. Several countries across the region are revisiting their labour policies to rebalance workforces, cut reliance on migrant workers and open up more jobs for citizens — especially younger workers entering the job market and mid-career professionals looking to reskill. Alongside these hiring restrictions, Malaysia is also stepping up programmes focused on training and automation in industries that have long depended on manual labour, with the aim of easing the transition rather than disrupting business activity.
Deputy Human Resources Minister Datuk Seri Abdul Rahman Mohamad said the decline reflects ongoing measures to prioritise local talent and tighten quota approvals. “The ministry remains committed to reducing dependence on foreign workers across all sectors of the national economy,” he told lawmakers in the Dewan Rakyat.
Manufacturing and construction remain the two largest employers of foreign workers at 622,000 and 589,000 respectively. Plantations account for 262,000 workers, followed by agriculture (158,000), domestic work (about 100,000) and a small presence in mining and quarrying.
Malaysia’s plan ties back to the goals laid out in the 12th Malaysia Plan, which aims to bring the share of foreign workers down to under 15% of the total workforce by 2025. That target has been a key reference point for the government as it pushes employers to look to local talent first before turning to migrant labour. Under the next planning cycle, the government is aiming for deeper reductions — below 10% by 2030 and down to 5% by 2035. Officials say the freeze on new quota approvals is continuing, with employers required to exhaust local hiring channels before applying for migrant talent.
Industry groups are watching the shift closely. While many industries have welcomed efforts to strengthen local employment pipelines, employers in labour-intensive sectors such as plantations, construction and manufacturing have repeatedly raised concerns about shortages, especially for difficult-to-fill physical and technical roles.
This shift isn’t happening in isolation. Several countries across the region are revisiting their labour policies to rebalance workforces, cut reliance on migrant workers and open up more jobs for citizens — especially younger workers entering the job market and mid-career professionals looking to reskill. Alongside these hiring restrictions, Malaysia is also stepping up programmes focused on training and automation in industries that have long depended on manual labour, with the aim of easing the transition rather than disrupting business activity.
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