Key Factors Driving MNC Relocations and Measures to Address Singapore's Competitiveness

Mr Yip Hon Weng asked the Deputy Prime Minister and Minister for Trade and Industry in light of the recent decisions by some multinational companies (MNCs) to relocate their headquarters, withdraw operations or retrench workers in Singapore (a) whether the Ministry has studied the key factors driving these decisions by MNCs; (b) whether the Government’s initiatives aimed at retaining these companies have achieved their intended outcomes; and (c) whether there are concerns that the Singaporean workforce is losing its competitive edge in terms of skills compared to workers from other countries.

The number of retrenchments in the second quarter of 2024 was 3,270, compared to 3,030 in the first quarter of 2024 and 3,820 in the first quarter of 2023. In comparison, total employment grew by 11,300 in the second quarter of 2024, more than double the increase of 4,700 in the first quarter of 2024. In the second quarter of 2024, more than half of all retrenched residents were able to secure jobs within six months of being retrenched.

Singapore remains an attractive location for investments. The Singapore Economic Development Board attracted S$5.4 billion in fixed asset investment (FAI) commitments in the first half of 2024 and is on track to meet its medium- to long-term investment commitment goal of S$8 billion to S$10 billion in FAI this year. Investments announced this year include plans by cloud service provider Amazon Web Services to invest an additional S$12 billion into its existing cloud infrastructure in Singapore over the next four years for cloud and artificial intelligence projects, and pharmaceutical company AstraZeneca’s planned S$2 billion manufacturing facility for antibody drug conjugates. These investments will translate into good jobs for Singaporeans. Some 60% of locals earning a gross monthly income of above $12,500 are employed by foreign-owned firms.

Singapore’s workforce is a key reason why multinational corporations (MNCs) invest in Singapore. INSEAD's 2023 Global Talent Competitiveness Index ranked Singapore’s workforce as the most competitive in Asia and the second most competitive globally.

Companies, including MNCs, may choose to close or reduce their presence in Singapore for various reasons, such as changes in market dynamics leading to poor performance by the firm, or shifts in the company’s global strategy leading to changes in their operating structure. In such situations, the Government works closely with the companies and unions to assist the retrenched workers with skills upgrading and job matching.