SINGAPORE — As a fresh polytechnic graduate, retrenchment was the last thing on Mr Y C Tan’s mind when he first started work as a junior game designer. But barely 15 months into the job, he was among three in four employees let go by the studio in June.
“There were some clues and indications of the game (title) slowing down but I didn’t know it would have such an impact this quickly,” said Mr Tan, in his 20s, who declined to have his full name published.
“This being my first full-time job also contributed to the shock, as I wasn’t sure if this was a common thing, or what would happen next,” he added.
He declined to name his employer as the layoffs are due to the studio’s plan to shut down the game title and its customers have not been informed about the development.
Like Mr Tan, one former Grab employee who spoke to TODAY was recently caught off guard when he was informed — on a weekday night while on leave — that he was among 1,000 people being made redundant. Just last September, Alex Hungate, the chief operating officer of the ride-hailing and food delivery app had told Reuters: “I know other companies have been doing mass layoffs, so we don’t see ourselves in that category.”
The retrenched employee, who declined to be named, had felt secure because after the last retrenchment round in 2020, Grab managed to avoid mass layoffs even as its competitors and other tech companies were shedding headcount. The fact that his team had been doing well in the company gave him a deeper sense of security.
“I felt like I was in the safest team, in the safest company in the industry,” said the 30-plus-year-old who had worked in Grab for “a handful of years” in a senior technology role.
“All who reached out to me (after the layoff) expressed the same ‘wow, it came out of nowhere’ sort of feeling.”
Besides Grab, other tech companies like Amazon and Meta had also conducted multiple retrenchment rounds since the pandemic started, amid challenging economic conditions and business reorganisation.
Associate Professor Walter Theseira, a labour economist from the Singapore University of Social Sciences (SUSS), said: “The incidence of retrenchments is still significantly below that of past serious shocks such as the Global Financial Crisis and might be considered to be only slightly above the ‘normal’ level of retrenchments.”
Agreeing, independent economist Song Seng Wun said: “We are still watching it as it happens.”
“We don’t know for sure if indeed the cycle is getting shorter or a case of what we’re currently seeing is the ongoing post-Covid shift in the consumption of goods and services,” said Mr Song, who was previously with CIMB Private Banking.
However, Mr Adrian Choo, chief executive of recruitment firm Career Agility International, believes that retrenchments now “are no longer necessarily tied to recession cycles”.
Instead, they may be due to rapidly changing technology or shifting of customer demand for products, which may sometimes result in the company closing entire business units and setting up new ones, he said.
The recent spikes in retrenchment numbers could be driven by different forces.
Mr Linus Choo, executive director of recruitment firm Ethos BeathChapman Asia, said that the high rate of retrenchment in late 2020 was “largely due to cost pressures brought on by Covid-19’s disruption to businesses” he said.
“(Retrenchments from the) second quarter of 2022 onwards may squarely be pinned to the past quarter of interest rate hikes by the United States Federal Reserve, knock-on effect brought about by failures of some large financial institutions, and the war in Ukraine that has driven the cost of raw materials and commodities up.”
Some experts such as Mr Alex Holmes, a senior economist at Oxford Economics, also noted that the recent retrenchments were mainly conducted by a few specific industries.
Though given that Singapore is “a very externally focused economy”, he expects more jobs to be affected as “exports soften and global growth fades”.
According to latest figures, Singapore’s non-oil domestic exports contracted for the eighth consecutive month in May, falling by 14.7 per cent.
“So at the moment, (retrenchment) is very narrow-based in certain industries… But I wouldn’t be surprised if it does start to widen over the coming months and quarters,” Mr Holmes said.
Mr Mark Teoh, organisation transformation leader at Deloitte Southeast Asia, added that companies may go through multiple rounds of layoffs instead of conducting a one-off exercise due to evolving business needs, market conditions, and restructuring efforts.
“It allows them to adjust their workforce gradually and align resources with changing priorities,” said Mr Teoh.
Mr Goh Jia Yong, people advisory services partner at professional services firm EY, noted that the industries driving the retrenchments “are observed to generally have good age and generational diversity”.
“Retrenchment efforts within these sectors will affect both younger and mature workers alike,” he added.
Independent human resource analyst Adrian Tan said that company might choose to axe its older workers who tend to hold more senior positions and cost more on the payroll.
However, when entire departments or units get shut down due to “a business pivot”, then “young or old, (there’s) no discrimination” in layoffs, he added.
Companies in Singapore are obligated to inform MOM when carrying out retrenchment exercises.
MOM did not respond to TODAY’s queries on the number of firms which have conducted more than one round of layoffs since the pandemic, or whether the number of companies executing multiple rounds of retrenchments has increased over the years.
‘WHY ME?’ EX-EMPLOYEE WONDERED
An engineer in his 20s, who gave his first name as Muhammad, was made redundant this year during his company’s retrenchment exercise, less than a year into the job — his first since graduating from university last year.
Though he had tried to brace himself as best as he could for D-Day, as the impending layoffs were “announced beforehand”, he still felt the shock when the moment arrived.
“I was pretty much at a loss for words and was just trying to mentally calm myself down,” he said.
“Questions like ‘why me?’ ran through my mind, but I couldn’t bring myself to ask them. Perhaps because I knew they wouldn’t give a proper answer anyway.”
Meanwhile at job portal company Indeed.com, Mr Syukri Azman said there was already some writing on the wall — in the form of a hiring freeze from last November and growing chatter about “some reorganisation happening” — which left the staff simmering in uncertainty for months until the axe actually fell in March.
“But throughout the entire period, nobody knew (for certain). Even the regional senior directors had no idea,” said the 29-year-old, who was working in a training and people development role there for about 15 months.
Those who spoke to TODAY said they received severance packages that were largely tied to the length of their tenure in the company.
For the retrenched engineer Muhammad, this allowed him to take up courses and focus on his job search without worrying about having to take on a part-time job, as the severance package he received could have tied him over for “a few months at least”.
He managed to secure a new job in the same industry “within three to five months” of his retrenchment.
As for Mr Syukri, having been in the workforce for about eight years, he took a three-month break from active job applications to pursue side gigs that he enjoyed, including working on his own lifestyle content creation channel, Syukeats.
More importantly, he also spent the time carefully thinking about his next career steps while speaking with people in the industries he was interested in to better position himself during job applications.
More broadly, on the job supply side, junior roles tend to be more readily available, said Mr Adrian Choo of Career Agility International.
“On the workers’ end, younger workers — given their relatively shorter working experience — tend to command comparatively lower pay, thus making them less expensive to hire from a prospective employer’s point of view,” he said.
Mr Adrian Tan the human resource analyst added that younger workers may also be more willing to take pay cuts since they typically have fewer obligations than older workers.
And a willingness to reach out for help and tap one’s network to find work opportunities play a part too, he added.
“Older folks are more face conscious, whereas younger people will #opentowork for the world to know,” said Mr Tan, referring to a hashtag commonly used on LinkedIn by users to indicate that they are searching for work opportunities.
SUSS’ Assoc Prof Theseira said that the bottom line in job search and hiring is that employers must want to hire the person, but the latter must also be willing to seek out and accept employment offers.
However, he added that older workers generally suffer on both ends, as they are in less broad demand, and are also generally less willing to accept a wide range of employment opportunities.
“This is largely driven by the greater specialisation of older workers, which both narrows the potential opportunities that use that level of skills or experience, and also reduces their willingness to accept or search for opportunities outside their specialisation,” Assoc Prof Theseira said.
He added that the fewer available senior positions that fit their specialisation, experience and pay expectations, further compound the difficulties in them getting rehired.
In response to TODAY’s queries, the National Trades Union Congress (NTUC) said that NTUC and unions “stand ready to help workers in preserving jobs and ensuring that retrenchments at unionised companies are conducted in a fair and objective manner”.
NTUC will continue to support workers — including younger workers — in training and placement, as well as in job-matching, career guidance and skills upgrading services, it added.
HOW TO BEST HELP FUTURE WORKERS
Ms Ling of OCBC said that companies hiring and firing more quickly in response to market conditions “is not necessarily a negative thing, because if firms are more agile, they may be better positioned to survive the challenging times”.
However, she acknowledged that such a situation would be “unsettling from the worker’s perspective”.
Asked if anything could be done on a national level to protect jobs in the face of more dynamic economic and business conditions, Mr Song the economist said that jobs can only be protected for so long.
“If you protect a job for one generation, you’re only buying time for the present,” he said, adding that business entities and economies would still need to keep up with market changes or risk losing out.
Mr Adrian Tan noted some economies may have stricter labour regulations that make it harder for companies to retrench workers. While it may make firms more prudent in hiring to avoid having to let go excess workforce, it may be taken to the extreme, reducing opportunities for full-time employment.
He added that it is “definitely good to have some form of financial subsistence” for workers, given the fast changing environment and how workers would need time to pick up meaningful skills in between jobs.
The Government has recently announced that it is examining such a support scheme to help workers get re-employed, albeit in a “targeted” manner.