Workers have so far been sheltered from the full impact of pandemic by substantial govt support.
There is a limit to what the Government can do to cushion the weakening job market, said observers, who expect tens of thousands of jobs here to be cut within the next half a year, when the full impact of the Covid-19 pandemic will be felt.
Measures that have staved off retrenchments, such as the recently extended Jobs Support Scheme (JSS) that helps offset part of the wages of local workers, draw heavily on the country’s reserves, added experts, who fear the intensity of layoffs will build up for a while.
Aviation, tourism, retail, hospitality, entertainment, food and beverage, marine and offshore, and construction will be hit hard.
Their views echoed those of Deputy Prime Minister Heng Swee Keat, who in a ministerial statement on Aug 17 said that retrenchments will be inevitable despite the Government’s best efforts. He added that the JSS cannot be sustained at current levels.
Labour experts said workers have so far been sheltered from the worst economic effects due to substantial government support.
National University of Singapore senior economics lecturer Kelvin Seah said: “Nobody knows how long (the pandemic) will last. There is too much uncertainty. It will depend on whether countries are able to contain the virus effectively.”
The outlook remains uncertain and not just within Singapore, said the Ministry of Manpower (MOM). It added that the impact of the pandemic and the mitigation measures were not fully felt in the first quarter of the year.
“We are now starting to see the deeper impact of Covid-19 on the labour market,” MOM said.
National Trades Union Congress (NTUC) deputy secretary-general Cham Hui Fong said: “Within the unionised sector, we are witnessing an increase in the number of retrenched workers, especially during these few months, as compared to last year.”
The pandemic will be long drawn and business volumes for many sectors will be unable to recover for a while, she said. Some firms would have no choice but to resort to layoffs after exhausting other cost-cutting measures.
Retrenchments more than doubled in the second quarter of this year, with 6,700 workers laid off, up from 3,220 in the first quarter. This was higher than the peak of 5,510 during the 2003 Sars outbreak, but below the 2009 global financial crisis high of 12,760.
And this is only the tip of a large iceberg, warned observers.
Last month, labour chief Ng Chee Meng said he expects job losses to rise in the next six to 12 months as the economic impact of the pandemic becomes widely felt.
Dr Seah noted that layoffs typically do not happen right after businesses see a fall in their profits.
“Although businesses might be losing money, they may still try to retain workers,” he added. “If profits continue to fall for a sustained period, then companies have little choice but to lay off workers. Some of these businesses may not even survive themselves.”
When firms in key sectors like aviation and tourism fare poorly, “there will be a domino effect since these people suffer a fall in income”, Dr Seah pointed out.
The aviation and aerospace sectors have been badly hit by Covid-19, with air travel crippled by border closures and airlines grounding planes. Aerospace giant Pratt & Whitney, aircraft manufacturer Airbus and engine maker Rolls-Royce are among major firms that have cut staff here due to declining business.
The impact has trickled down to other businesses, including Resorts World Sentosa and Millennium Hotels and Resorts, which have also retrenched workers here.
Mr David Leong, managing director of human resources firm PeopleWorldwide Consulting, said most affected sectors are running at sub-optimal capacities and conditions.
“The industries that depend on footfall, face-to-face human traffic are the ones that are critically crippled,” he added. “This may take half a year to go by before we can see any modest signs of recovery.”
Mr Paul Heng, managing director of NeXT Career Consulting Group, pointed out that there will always be job cuts – including from business units moving out of the country and mergers and acquisitions. The pandemic has just necessitated more.
But retrenchments will always be a last resort, said Ms Cham, adding that embattled businesses would first implement cost-cutting alternatives such as a shorter work week, no-pay leave and wage cuts.
Unions and associations said they have been busy working with firms in recent months in an effort to save as many jobs as possible.
For instance, the fintech industry is not spared from the economic fallout of Covid-19, said Singapore FinTech Association president Chia Hock Lai. A recent survey by the association found that over a quarter of its members had reduced manpower, although many indicated that the downsizing was temporary.
Mr Gilbert Tan, chief executive of NTUC’s Employment and Employability Institute, which offers training and job matching for Singaporeans who have lost their jobs, said it will continue to hold job fairs to offer opportunities to those affected.
Singapore Human Resources Institute president Low Peck Kem advised workers to quickly bounce back if they can, including taking on gig work or reaching out to different industries.
“The longer you stay unemployed, the more difficult it is to go back to the workforce,” she added.