By Singapore’s resident unemployment rate rose to 3 per cent in September 2026, up from 2.9 per cent in August, while citizen unemployment ticked up to 3.1 per cent from 3 per cent over the same period, according to advance data from the Ministry of Manpower (MOM) reported by The Business Times and AsiaOne on 30 October 2026. Overall unemployment held steady at 2 per cent.
Retrenchments climbed to 4,800 in the third quarter, up from 4,620 in the second quarter and the highest level since late 2020, AsiaOne reported. The Ministry of Manpower attributed the increase mainly to business restructuring, with cuts concentrated in information and communications, financial services and manufacturing. MOM said “emerging weaknesses in parts of the labour market” were evident, while noting that “employers remained cautious about hiring and wage increases amid continued uncertainty”.
What the resident and citizen rates actually measure
Singapore reports three unemployment rates, and the distinctions matter for HR teams interpreting the data. The overall rate of 2 per cent covers all unemployed people in the labour force, including foreign workers on employment passes and work permits. The resident rate of 3 per cent narrows the lens to Singapore citizens and permanent residents. The citizen rate of 3.1 per cent strips out permanent residents entirely.
The gap between overall and resident unemployment is structural, not a sign of policy failure. Foreign workers in Singapore are typically on tied passes, meaning they must leave the country shortly after losing a job. That keeps the overall rate lower because unemployed non-residents do not remain in the labour force to be counted. HR teams planning local headcount should watch the resident and citizen rates more closely than the overall figure, since those reflect the domestic talent pool that stays in Singapore after retrenchment.
Why retrenchments rose while employment grew
The Q3 data contains an apparent contradiction: retrenchments rose to 4,800, yet total employment grew by 27,700, up from 11,400 in Q2 and higher than the 25,100 recorded in Q3 2025. The explanation lies in where the growth came from. MOM reported that most employment gains were driven by non-residents in construction and manufacturing, while resident employment growth was supported by essential and public services. Growth in external-facing sectors stayed subdued.
This pattern suggests a two-speed labour market. Sectors exposed to global demand, such as information and communications and financial services, are restructuring and shedding roles. Domestic-oriented sectors, including public services and construction, are still hiring. For HR and payroll teams, the practical implication is that retrenchment risk is not evenly distributed. A company in financial services faces a different labour market than one in healthcare or public administration.
The incidence of retrenchment remained at two per 1,000 employees, according to AsiaOne, meaning the absolute rise in retrenchments partly reflects a larger employed workforce rather than a sharp increase in the rate of job cuts.
What the forward indicators show
MOM’s advance release includes survey data on employer expectations, and the signals are mixed. The share of firms expecting to hire in the next three months rose from 30.5 per cent in August to 42.3 per cent in September, but remained below July levels. The share expecting to raise wages rose from 16.9 per cent to 19.9 per cent, also below July. The share expecting to retrench rose from 2.8 per cent to 3.1 per cent.
MOM said the combination of rising retrenchment expectations and higher actual retrenchments indicates weaknesses in the labour market that should be monitored. For HR leaders, the hiring expectations figure offers a useful benchmark. If 42.3 per cent of firms expect to hire, the market is not in contraction, but the caution around wages suggests compensation budgets may stay tight into 2027.
What happens next for employers
The full MOM labour market report will be released in mid-December 2026 and will provide more detail, including the re-entry rate for retrenched residents and sectoral breakdowns. Employers with Singapore operations should use the interim period to review restructuring plans and consider whether voluntary separation schemes or outplacement support are appropriate for affected staff.
The data also has implications for workforce planning under Singapore’s Fair Consideration Framework. Employers retrenching local staff while continuing to hire foreign workers in other roles may face additional scrutiny from MOM. The ministry has previously signalled that companies with weak local hiring records can have work pass privileges curtailed.
For payroll teams, the practical task is ensuring retrenchment benefits are calculated correctly under the Employment Act and any contractual terms. Singapore does not mandate statutory retrenchment benefits, but MOM encourages employers to provide them based on years of service. The norm is two weeks to one month of salary per year of service, though this is not a legal requirement unless specified in the employment contract or collective agreement.
Sources: AsiaOne, The Business Times
Photo: Singapore skyline at dusk by Terence Ong, CC BY 2.5
