SINGAPORE: 4,620 retrenchments. The number jumps out from Singapore's labour market figures for the second quarter of 2026, marking the highest quarterly total since the fourth quarter of 2020.

But the number of retrenchments is only one measure of how Singapore's labour market is performing.

Singapore’s labour market remains relatively healthy. Employment continued to grow, unemployment remained low, and there were still 1.48 job vacancies for every unemployed person.

What deserves closer attention is what happens after someone loses a job. How quickly do they return to work? What kind of job do they eventually find?

For this, we look at the rate of re-entry into employment. Among retrenched residents, the proportion who returned to employment within six months was 54.9 per cent in the second quarter, down from 60.7 per cent in the first quarter.

These figures should be interpreted carefully because they refer to different groups of workers. The latest figure covers residents retrenched in the fourth quarter of 2025, while the previous figure covers those retrenched in the third quarter of 2025.

Following the same group over a longer period offers another perspective. Among residents retrenched in the second quarter of 2025, 57.4 per cent had returned to employment within six months, rising to 69.8 per cent after a year.

The figures show that more displaced workers find employment over a longer period. But why might some workers take longer to secure a new job when Singapore continues to add jobs?

WHEN JOBS EXIST, BUT NOT NECESSARILY FOR THE SAME WORKERS One possible explanation lies in uneven employment opportunities across sectors.

Though total employment grew by 11,400 in the second quarter, most of the increase came from non-residents, mainly Work Permit holders in construction and manufacturing. These jobs may offer limited opportunities for retrenched professionals with different skills and experience.

Resident employment grew by a modest 2,200, mostly in domestic-oriented sectors. Information and communications and financial services also added some resident workers.

However, hiring in these sectors occurred alongside retrenchments. Retrenchments were concentrated in manufacturing, information and communications, and financial services. Job vacancies also fell from 73,300 in March to 68,600 in June, driven mainly by fewer PMET openings in information and communications and financial services.

These patterns show that hiring and retrenchments can occur within the same sector, even as job vacancies decline. The opportunities available may differ from the types of jobs that retrenched workers previously held, making it harder for some to find suitable employment. Finding a suitable match can thus take time, even when jobs are available. Some workers face a trade-off between returning to work quickly and holding out for a role closer to their previous responsibilities, seniority or pay. WHAT HAPPENS AFTER RE-EMPLOYMENT?

The speed of re-employment captures only part of a worker’s transition. It leaves another part of the adjustment unseen: the kind of job that worker returns to.

For experienced workers, part of the difficulty may be carrying accumulated experience into a new setting. A mid-career professional may have spent 15 years building knowledge, relationships and expertise. Some of that experience transfers readily across firms and industries. Other skills may command less value outside the worker’s previous occupation or sector.

Consider, for illustration, a professional earning S$8,400 a month, the 2025 median for full-time employed resident PMEs, excluding employer CPF contributions. Suppose the worker is retrenched and, six months later, finds a job paying S$6,000, roughly what a PME at the 25th percentile earns.

Employment statistics would record a successful re-entry. However, the worker has gone six months without a salary, potentially offset by retrenchment benefits or other financial support, and now faces substantially lower monthly earnings.

Re-employment, therefore, tells us whether someone found another job, but less about how much of the economic loss from retrenchment has been recovered.

BUILDING ON SINGAPORE’S TRANSITION SUPPORT The support workers need depends on the challenges they face. Some may need help identifying suitable vacancies, while others require additional training to move into new roles or sectors.

Singapore already has a broad set of measures to support workers through career transitions, including career coaching, job matching, Career Conversion Programmes and reskilling support. Career Conversion Programmes in particular can bridge training and job matching by training workers for actual roles that companies need, “instead of learning a new skill and then hoping to find a job that uses it,” as Acting Manpower Minister Jasmin Lau put it.

Employers can also contribute by recognising how skills and experience gained in one sector may apply in another. WHAT SHOULD WE WATCH NEXT?

One quarter of weaker six-month re-entry is insufficient to establish a persistent deterioration in Singapore’s labour market. Some degree of job turnover is a normal feature of a dynamic economy. Firms expand, contract and reorganise as economic conditions change.

The concern is how costly the transition becomes for affected workers, particularly when finding a new job involves a substantial loss of earnings. The next few quarters will help establish whether the recent decline in six-month re-entry is temporary or whether some workers are taking longer to find employment. Equally important is what happens to their earnings after they return to work. Both measures are needed to understand how successfully Singapore's labour market is adjusting.

Chua Yeow Hwee is an Assistant Professor in Economics at the Nanyang Technological University (NTU). He is also the Deputy Director of the Economic Growth Centre at NTU. The opinions expressed are those of the writer and do not represent the views and opinions of the institutions that he is in.