Retrenchment in Singapore Through 2025 and Into 2026

Retrenchment in Singapore picked up materially from late 2023, accelerated through 2024, and continued at elevated levels into 2025 before moderating into 2026. The shift was driven by a combination of factors: global technology sector rationalisation following the post-pandemic hiring surge, regional banking restructurings, automation in middle- and back-office functions, and selective contraction in professional services and media.

MOM's Labour Market Reports — the authoritative quarterly publication — captured the pattern. The data are reported sector by sector, with cumulative notification counts under the mandatory retrenchment notification regime introduced under the Tripartite Advisory framework. Employers retrenching five or more employees within any six-month period must notify MOM via the online portal within five working days of giving the affected employee notice.

The aggregate figures matter less than the sectoral distribution. The 2024-2025 wave was concentrated in:

• Technology platforms and software-as-a-service businesses;
• Investment banking and certain front- and middle-office banking functions;
• Mid-tier professional services firms, particularly in audit and consulting;
• Selected segments of manufacturing facing global demand softness;
• Media, marketing and publishing operations restructuring around new digital and AI-driven models.

Sectors outside this list saw comparatively modest retrenchment activity. Healthcare, education, infrastructure construction, and segments of financial services with continued growth remained net hirers.

For employees in affected sectors, the cycle reinforced the importance of preserving documentation — performance reviews, contracts, retrenchment letters, and the MOM notification details — at the point of retrenchment, both to support any subsequent claim and to access support schemes promptly.

One distinctive feature of the 2024-2025 cycle was the visible tightening of TAFEP and MOM scrutiny of retrenchment exercises. Several themes recurred in MOM communications and TAFEP engagement.

Fair selection scrutiny

Employers retrenching employees on a particular protected characteristic — particularly nationality — drew MOM attention. Where local employees were disproportionately selected for retrenchment while foreign professionals continued in similar roles, the Fair Consideration Framework engaged and follow-up was substantial. MOM reminded employers that the FCF expectations apply not just at recruitment but throughout the employment lifecycle, including retrenchment.

Notification accuracy

The MOM notification form captures the rationale, the selection criteria, the support being extended, and the demographics of affected employees. Inconsistencies between the form and subsequent communications (to employees, in subsequent advertising for similar roles, or in public statements) were a recurring source of follow-up.

Pre-retrenchment alternatives

TAFEP and MOM publicly emphasised the Tripartite Advisory expectation that employers explore alternatives — redeployment, shorter work weeks (with consent), no-pay leave, training and redeployment — before retrenching. Employers who proceeded straight to retrenchment without documented consideration of alternatives drew more attention.

Outplacement and support

The Tripartite Advisory expects employers to provide outplacement support, particularly for senior employees, and to refer affected employees to Workforce Singapore, e2i, and SkillsFuture. Where employers had visibly minimal support, MOM and TAFEP intervened.

Workplace Fairness Act 2025 layer

The enactment of the Workplace Fairness Act 2025 in 2025 added a binding statutory layer to what had previously been TGFEP guidance. Discriminatory selection during a retrenchment exercise now exposes the employer to statutory claims, in addition to wrongful dismissal claims under the Tripartite Guidelines on Wrongful Dismissal.

One of the central policy responses to the 2024-2025 retrenchment cycle was the SkillsFuture Jobseeker Support Scheme, launched in 2025. The Scheme provides monthly financial support to qualifying retrenched workers actively re-engaging the labour market.

Headline structure

The Scheme provides monthly payments over a defined period to retrenched workers who meet eligibility criteria, including involuntary unemployment status, prior employment history meeting a defined minimum, and active participation in jobseeking and training activities. Payments are tapered, with a higher amount in the early months and a lower amount as the support period continues, to support transition without creating disincentives.

Eligibility

Eligibility broadly captures workers who have been involuntarily unemployed (retrenchment, contract end, or business closure), with a prior employment record meeting the minimum, residing in Singapore, and actively engaging the labour market through jobseeking, training, or career conversion activities. Specific income, age, and prior-employment thresholds are set out in the SkillsFuture Singapore policy documents and are reviewed periodically.

Conditions

Recipients must demonstrate active engagement — including registration with Workforce Singapore, participation in approved training, attendance at job-matching activities, and reporting requirements. Material non-compliance can lead to suspension of payments.

Interaction with retrenchment benefits

The Scheme is a supplementary public benefit and does not replace the employer's contractual or statutory retrenchment benefit. Employees who receive retrenchment benefits from the employer remain eligible for the Scheme, subject to the standard eligibility criteria.

Practical engagement

Retrenched workers should engage Workforce Singapore as the first port of call, both to access the Scheme and to plug into the broader support architecture — career coaching, job matching, Career Conversion Programmes, and SkillsFuture training subsidies.

Several patterns characterised the more successful responses by retrenched employees during the 2024-2025 cycle.

Read the retrenchment letter carefully

The letter sets out the stated reason, last working day, notice arrangements, retrenchment benefit, and final pay computation. Where any element looked incomplete or inconsistent with the contract, prompt clarification with HR (in writing) preserved the position. Employees who waited weeks or months before raising issues often found themselves on the wrong side of a constructive acceptance argument.

Calculate statutory entitlements

Notice (contractual or Employment Act 1968 default), unpaid salary, accrued leave encashment, and retrenchment benefits if at least two years' service. Where employer figures diverged from the calculation, the divergence was raised early and either explained or corrected.

Activate support promptly

Workforce Singapore, e2i, NTUC (for members), SkillsFuture, and the Jobseeker Support Scheme have application processes that take time. Starting early — ideally on or before the last working day — materially shortened the period without income or activity.

Document the timeline

Where the retrenchment looked discriminatory or pretextual, contemporaneous notes of conversations, retention of relevant emails, and identification of witnesses materially supported subsequent TADM mediation or ECT claims. Employees who left this until the formal dispute stage often found themselves without the records they needed.

Be cautious about settlement agreements

Settlement agreements presented at the retrenchment meeting often included broad releases of all claims. Signing without considering the release scope, the calculation of the figure, and any restrictive covenants foreclosed later claims. Legal advice on the agreement — even a single-hour review — was a high-return investment for many employees.

What went well

• Documented business case. Board or leadership sign-off on a written paper setting out the rationale, the alternatives considered, the headcount reduction, and the financial impact.
• Objective selection. Selection criteria identified before the affected employees were named, applied consistently, and documented.
• Timely MOM notification. Submitted within five working days, with consistent narrative across the form and other communications.
• Outplacement and support. Third-party outplacement providers, internal HR support, reference letters, and explicit signposting to Workforce Singapore and SkillsFuture.
• Consistent communication. One-on-one meetings before broader internal announcements, with a clear messaging framework, FAQs, and named points of contact.

Where exercises went wrong

• Discriminatory selection patterns. Particularly along nationality lines, drew MOM and TAFEP scrutiny under the FCF and the TGFEP. Where the WFA 2025 was in force, statutory claims followed.
• Inconsistent narrative. The retrenchment was described as "redundancy" to the employee, "performance" to the team, and "restructuring" in public communications. Inconsistency exposed the employer in subsequent dispute.
• Re-hiring soon after retrenchment. Posting a similar role within weeks of retrenching the previous incumbent triggered both employee disputes (constructive characterisation of the dismissal) and MOM scrutiny.
• Late MOM notification. Late notifications were followed up by MOM and weakened the employer's narrative in any subsequent engagement.
• Inadequate support. Minimal outplacement or training support drew TAFEP attention. The reputational consequences sometimes outweighed the cost savings.

The MOM Labour Market Reports through early 2026 showed moderation in the retrenchment pace, although certain sectors continued to restructure. Several themes will shape the next phase.

WFA 2025 in operation

The Workplace Fairness Act 2025 is now operational, and the first wave of statutory discrimination claims under the Act is feeding through TADM mediation and the Employment Claims Tribunals. Retrenchment exercises during 2026 will be the first major test of the Act's reach in a redundancy context.

AI-driven role rationalisation

Restructurings driven by generative AI and adjacent technologies are expected to continue, affecting roles in customer service, content production, certain analytical functions, and entry-level professional services. The Tripartite Advisory's focus on redeployment, reskilling, and Career Conversion Programmes is particularly relevant here.

Continued Fair Consideration Framework enforcement

MOM has indicated that FCF enforcement will continue to be a focus area, particularly for employers that retrench locals while retaining or hiring foreign professionals in adjacent roles.

Refinement of the Jobseeker Support Scheme

The SkillsFuture Jobseeker Support Scheme will be reviewed and refined based on early-cycle data. Eligibility thresholds, payment levels, and conditions may be adjusted.

Tripartite Advisory updates

The Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment has been updated in cycles since its original issuance. Further updates aligning with the WFA 2025 and the Jobseeker Support Scheme are anticipated.

This page is general information, not legal advice. Always consult a Singapore-qualified lawyer holding a current Practising Certificate before acting. For an initial enquiry, see Singapore employment lawyers or visit find a lawyer.

For employees facing retrenchment

• Read the retrenchment letter carefully. Confirm last working day, notice arrangements, retrenchment benefit, and final pay computation.
• Calculate your statutory minimum entitlements under the Employment Act 1968.
• Engage Workforce Singapore, e2i, NTUC (if a member), SkillsFuture, and the Jobseeker Support Scheme promptly.
• Document the timeline. Retain relevant communications.
• If you suspect discrimination or that the "retrenchment" was a cover for another dismissal, approach TADM for mediation. Limitation periods at the ECT are short — typically one year from the cause of action under the Employment Claims Act 2016.
• Before signing a settlement agreement, consider obtaining legal advice on scope of release, calculation, and any restrictive covenants.

For employers planning a retrenchment

• Before announcement: written business case, alternatives explored and documented, board or leadership sign-off, objective selection criteria identified before naming employees.
• Review selection against the Workplace Fairness Act 2025 and TGFEP protected characteristics.
• Submit the MOM mandatory retrenchment notification within five working days of giving notice (where the five-in-six-months threshold is met).
• Pay retrenchment benefits per the contract, policy, or Tripartite Advisory benchmark. Provide outplacement support, reference letters, and clear signposting to public support schemes.
• Communicate consistently. One narrative across the employee, the team, and any external communications.
• Engage external counsel for sensitive or sector-leading exercises.