Layoffs expected to reach 1998, 2001 levels
Layoffs expected to reach 1998, 2001 levels
But 30,000 new jobs will be created in construction, health care, public sectors
By CHUANG PECK MING
ACTING Manpower Minister Gan Kim Yong yesterday warned that unemployment will climb and layoffs could reach the levels posted in the 1998 Asian financial crisis and the 2001 downturn if the economy ‘contracts sharply’ this year.
Mr Gan: Expects retrenchments to rise significantly in 4Q08
This means that the retrenchment number could hit 30,000, which was the number of workers axed in 1998. The number let go in 2001 was about 26,000.
‘The number of retrenchments and early termination of contracts could increase further over the next few quarters, as more companies restructure their operations to respond to the economic downturn,’ Mr Gan told Parliament.
While the official numbers have not come in, early notifications provided voluntarily by companies show that 4,800 workers were retrenched in the fourth quarter of 2008, he said. And another 3,300 could be laid off over the next few months.
But the silver lining is that more than 30,000 new jobs would be created in growth sectors such as construction, health care, public administration and the integrated resorts.
Trade and Industry Minister Lim Hng Kiang, who reported that strong investments in the pipeline alone would churn out 6,000 jobs this year, assured that there would be enough jobs for school leavers.
But he noted that the American and European economies are likely to recover only in the second half of the year, and warned that recovery here would be slow.
Prime Minister Lee Hsien Loong already gave notice last Friday that the government is again trimming its 2009 economic growth forecast. The current official growth projection, which was adjusted only early this month, is minus 2 to plus one per cent.
‘In fact, employment growth has begun to slow down in the second half of 2008 and more so in the fourth quarter,’ Mr Gan said yesterday. ‘The overall unemployment rate for 2008, which will be released at the end of January, will be higher than the 2.1 per cent in 2007, which was a record low in 10 years.’
Layoffs for the first nine months of last year totalled 6,418. If early termination of contracts are included, the number of redundancies in the first nine months came to 7,478.
‘Figures for the fourth quarter of 2008 will only be available at the end of January,’ Mr Gan said. ‘Nevertheless, we expect the number of retrenchments to rise significantly in the fourth quarter of 2008.’
The sectors hardest hit by job losses are manufacturing, tourism, transport and whole trade - sectors heavily dependent on external demand, he said. The financial services industry is also likely to see more job losses.
Source : Business Times - 20 Jan 2009
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