Impact of Layoffs by Big Tech Companies and Support Available for Affected Employees

Mr Saktiandi Supaat asked the Minister for Manpower in light of the reported ground-up initiatives by the IT community to help retrenched tech employees (a) in the last five years, how many employees have been annually laid off in the tech industry; (b) how successful has the Ministry’s job placement initiatives been in helping tech employees secure suitable replacement jobs; and (c) whether the Ministry will engage industry actors to centralise information to ensure fairer and more equitable re-employment processes.

Ms Mariam Jaafar asked the Minister for Manpower in the recent layoffs by large tech companies (a) what is the number of employees retrenched; (b) what is the number of Singaporeans retrenched; and (c) what are the roles that have been impacted.

Members have filed several Parliamentary Questions (PQs) regarding the recent spate of layoffs worldwide by tech firms. News sources have reported global retrenchment numbers at more than 21,000 employees across close to 50 tech companies worldwide in November 2022 alone, more than any other month this year. Members’ questions touch on two related issues. First, the impact of recent global tech layoffs on our local workforce. Second, the employment support measures for affected workers. I am taking these questions together to provide a more holistic response.

I will begin with an overview of employment trends in the tech sector, as well as the impact of recent global tech layoffs on our local workforce. While there are no clearly defined boundaries, the tech sector generally refers to the Information and Communications (I&C) sector. As of June 2022, the I&C sector employs 136,100 residents. This number has increased steadily over the past five years, growing by an average of 8,100 resident workers per year from June 2017 to June 2022. In comparison, retrenchment numbers over the past five years have been relatively low, at an average of 790 resident workers per year.

Mr Shawn Huang, Mr Melvin Yong and Ms He Ting Ru have also filed written questions asking about retrenchment in the sector in 2022. Based on the available labour market data, 260 residents were retrenched in the first half of this year, as compared to an increase of 7,000 residents employed in the sector.

Nonetheless, recent retrenchment notices received by MOM indicate an uptick in retrenchment of residents in the sector. In response to Miss Cheryl Chan, Ms Mariam Jaafar, Dr Lim Wee Kiak and Dr Shahira Abdullah’s questions on the number and profile of workers affected by recent layoffs, MOM has received notices of retrenchment for 1,270 resident workers from tech companies from July to mid-November 2022. Around eight in 10 of these affected workers were in non-tech roles – they worked for tech companies but they were in non-tech roles – such as sales, marketing and corporate functions, and around seven in 10 were aged 35 and below. This is consistent with the low median age of employed residents in the I&C sector.

Next, on employment support measures for affected workers. Most workers from the I&C sector have been able to secure a job soon after retrenchment. In the second quarter of 2022, the rate of re-entry into employment within six months post-retrenchment for residents in the sector was higher than for the overall economy, for both tech and non-tech workers. This suggests that retrenched non-tech workers had also found employment opportunities across the I&C sector and the larger economy.

To Dr Shahira Abdullah’s question on whether demand for tech talent has started to fall this year, job vacancies in the I&C sector have in fact continued to rise in the first half of this year, from 11,100 in December 2021 to 12,100 in June 2022. This latest figure is more than triple the 3,800 vacancies in June 2020. In addition, other sectors like financial services, including local banks, are also hiring for tech roles. Taken together, this reflects that there is strong absorptive capacity across the larger economy and opportunities for affected workers to fill in-demand roles.

Furthermore, half of the retrenching tech firms between July and mid-November 2022 have engaged outplacement partners or tapped on their industry networks to provide career transition services for their affected workers. In addition, the Taskforce for Responsible Retrenchment and Employment Facilitation (RTF), comprising representatives from Workforce Singapore (WSG) and NTUC’s Employment and Employability Institute (e2i), is reaching out to all affected local employees, including the youths which Dr Shahira Abdullah has asked about, to offer employment support. This includes information kits on job fairs, career advisory and coaching services.

For retrenched non-tech workers, we will also encourage them to consider Career Conversion Programmes (CCPs) as well as skills upgrading to improve their chances of returning to the workforce. The RTF provides relevant information on CCPs during their engagements with retrenching firms.

NTUC’s e2i also collaborated with Tech Talent Assembly, Accenture and Amazon Web Services to organise an Infocomm Jobs and Skills Fair in November 2022 providing some 400 jobs on offer. Hence, to Ms Joan Pereira’s question regarding tripartite partnership to support affected employees, it is already happening.

Responding to Mr Saktiandi Supaat’s question on the effectiveness of these job placement initiatives, seven in 10 resident workers from the I&C sector who took up the RTF’s assistance in 2021 found a new job within six months.

To ensure that affected workers receive timely and effective support, it is important that retrenching firms adhere to the requirement to submit notices of retrenchment to MOM within five working days of notifying affected employees.

To answer Ms Joan Pereira's question on whether tech firms have been prompt in submitting notices of retrenchment to MOM, the majority of retrenchment notifications from the I&C sector since July 2022 were submitted on time. Employers who do not submit on time are issued with caution letters.

Looking ahead, Dr Lim Wee Kiak has asked if the Government expects more layoffs of tech employees in the next six months. MOM is mindful that hiring demand may moderate in some parts of the I&C sector given macro-economic uncertainties and risks. We will continue to monitor closely retrenchment trends and we will render assistance to affected workers in both tech and non-tech roles through the RTF. We will also continue to work on expanding opportunities in the digital domain and invest in our workers to equip them with the skills and also with the experience to seize opportunities.

Thank you, Speaker. I thank the Minister for his reply. I have one supplementary question. Employees who have been dismissed or retrenched may need assistance, but may feel that the HR of their company are not on their side due to various circumstances. Would MOM be able to provide a channel or dedicated hotline for such employees to seek some advice as to what they can do and what options they have?

I thank the Member for her question. Today, there is a Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) hotline that these employees can call, although it is not purely dedicated to retrenchments alone. We would not hesitate to consider other means should the retrenchment numbers continue to rise. But, today, the numbers are still manageable.

As I have also mentioned in my reply earlier on, besides the hotline, there are significant efforts done by the RTF to reach out to employees who are being retrenched. On top of providing resources in the form of information kits on job fairs, career advisory and coaching services, the RTF also encourages retrenched non-tech workers to consider upgrading themselves through career conversion programmes (CCPs) and skills upgrading to improve their chances of returning to the workforce.

As I have shared earlier on, that while the retrenchments are happening in tech firms, there is a proportionate difference in tech roles and non-tech roles within these tech companies as well. Generally, the employees who are being retrenched in the tech roles have been able to find jobs much faster post-retrenchment compared to those in the non-tech roles, which takes a bit longer. Hence, the RTF is also focusing on helping retrenched employees in these non-tech roles to upgrade, to convert the skills, to pivot and to allow them a much better chance of getting employment. Thus far, we have been reasonably successful.

Thank you, Mr Speaker. I thank the Minister for his reply. I think he had not responded to the second part of my Parliamentary Question (PQ), which is whether this layoff will have a knock-on effect on the salary adjustment of workers in the tech industry. The Minister pointed out just now, that a large majority who were laid off were actually in the non-tech domain. The fact that they had been coming from the big tech firms, the salary adjustments would be quite significant for some of them, if they have to do career conversion or if they have to go to other companies that are not in this big tech space. Would the Minister clarify this?

I thank the Member for her supplementary question. Thus far, from the statistics that we have, the median income of workers in the I&C sector, has been on an upward trajectory, with the median gross monthly income, which includes employer's CPF, for full-time employed residents increasing from $5,700 in 2017 to $6,100 in 2021. As for the median salary of non-tech employees who have been retrenched, we do not have that data because retrenching firms are not required to include the salary data of retrenched employees when submitting Mandatory Retrenchment Notifications (MRNs) to the Ministry. Hence, I am unable to comment on the breakdown of the non-tech roles of these employees who are being retrenched and whether they will experience knock-on effects on salary adjustment later on.

In November 2022 alone, we monitored the four big tech firms which the media had reported on. About a third of the employees that were retrenched from those firms were in tech roles, and if you compare that with the second quarter of 2022, the number of tech vacancies that were available in the financial services sector outnumbered those being retrenched in the tech roles by 10 is to one.

If I use that as a proxy, it is a bit early for us to comment on whether there will be knock-on effects for those in tech roles in the immediate term, given the huge number of vacancies vis-à-vis those looking for a job. For the non-tech roles, as I have shared earlier on, we are supporting them through the RTF and TAFEP, we are going through e2i and WSG to encourage this group to upgrade, reskill and also attend some career conversion programmes. For the companies that have the ability to use NTUC's Company Training Committees, that is an added avenue for them to train and reskill their workers as well. I hope that answers part of your question.

Thank you, Mr Speaker. I thank the Minister for his detailed answers to my PQ. I have two supplementary questions. One is, I am mindful of the uncertain outlook that the IT sector is facing globally but may I ask the Minister about potential job opportunities in the future? I think Minister mentioned that the positions for tech is still abundant, but may I ask him about the private versus public tech opportunities? Because with the uncertain outlook, the private sector opportunities would probably be uncertain. Can Minister mention what type of skillsets and outlook would be needed for the young ones? Because we have been pushing for young people to go into the tech sector with the promotion of science, technology, engineering and mathematics (STEM) and all that. That is my first question.

The second question is in relation to my PQ. I think Minister has not answered the last part of my PQ, which is whether the Ministry will engage industry actors to centralise information to ensure fairer and more equitable re-employment processes.

I thank the Member for his supplementary questions. As I have shared earlier on, based on the data that we have available today and without sounding repetitive, the proportion of impacted workers in tech and non-tech roles from the four big tech firms mentioned earlier is about one-third to about two-thirds. The ones in tech roles are about one-third of the total proportion being retrenched. I also shared earlier on in my response to Miss Cheryl Chan's supplementary question that this group of people will find employment quite quickly. In terms of working to help those in non-tech roles, we are also stepping up efforts to help them.

The next few months are going to be quite critical, given the continued geopolitical uncertainties and also depending on whether the global supply chain disruptions continue. But we see that many of the areas that we have pivoted into and significantly invested in through our Industry Transformation Maps (ITMs) as well as the Job Transformation Maps that run alongside them, such as the financial services sector, seem to be still moving ahead as growth sectors. So, we will do whatever we can to pivot those that would want to be pivoted, that would want to be transformed, into these sectors.

At the same time, for the business-to-consumer (B2C) tech firms, we are watching developments very closely. Perhaps, I could request for Mr Saktiandi Supaat to file another PQ in the first quarter of 2023 to see how successful our follow-up action has been.

I thank the Minister for the response. I wanted to follow up on my PQ. I think I did not hear the answer to the first part of my PQ, which is the portion on those impacted; how many of those are Singaporeans versus foreigners.

My second supplementary question would be, I understand that there are still a lot of jobs available. But, in the current climate where businesses are also relocating or looking at their location strategies, is the Minister concerned at this point, given the rise in tech sector salaries in the recent past, whether our competitiveness as a tech sector – in terms of cost and availability of manpower and the ability to fill these roles quickly – is in any way compromised?

I thank Ms Mariam Jaafar for her supplementary question. The reason why we did not provide the level of granularity that she has asked for is that we typically do not break down resident data further into Singaporeans and Permanent Residents (PRs). We follow a practice that is aligned with the official statistics set out by the International Labour Organization (ILO), as statistical agencies worldwide typically cover the population residing in their country when presenting statistical releases, without a breakdown by nationality.

However, if I may provide an indication, citizens make up a large majority of our resident labour force, at about 85%. The PR population has also remained stable over time. So, if you take it together, this means that the resident data mirrors citizen data. And if we were to break it down, it provides little additional information.

To her separate point on the cost issue, we have taken a very curated and differentiated approach to upskill, to upgrade the skillsets of our entire workforce with a focus on the Singaporean Core as our principle. There will obviously be some parts in the entire value chain, for which companies will want to take advantage of offshoring some services to capture some arbitrage opportunities. But I do not think this is always possible or easy for companies.

I would humbly request that she files a separate PQ if she wants some level of granularity on offshoring, so that we can provide better statistics.

Thank you, Mr Speaker. Sir, I would like to know, for those who are retrenched, it was mentioned that seven out of 10 can find jobs in quite a short period of time. I think the big question is, of course, when they find jobs, are they equivalent jobs or are they of the same salary?

If MOM does not track at the point of time of the retrenchment, the salary, then I would like to ask MOM, why not? Would MOM start tracking now, so we will roughly know what is the gap that they are facing? And then, at least the Government can provide some assistance in this way, so that they can lessen or cushion the impact of retrenchment.

I thank Dr Lim for his supplementary question. I have earlier on shared that, thus far in the I&C sector, the median income has been on an upward trajectory.

Just to repeat, the median gross monthly income, including employer CPF for full-time employed residents increased from $5,700 in 2017 to $6,100 in 2021.

To go into the granularity for each type of non-tech role, I think would be very granular. If this is what you are suggesting for us to track, it is something that we could look into, but we need to understand why. Of course, we are not downplaying the issue and we have never taken our eyes off this at any time. But today, we do not see the switch into a lower-paying job for the people in non-tech roles as a fundamental issue that needs particular attention.

But we are very careful, in terms of making sure that our Singapore Core and our residents who are working here, continue to possess the skills and to keep ahead. In fact, this is the focus of what MOM will be looking at in the months ahead. I hope that that gives you some reassurance, that this is one aspect that we are singularly focused on.