Why are tech companies in S'pore laying off people?

Restructuring, rising employment cost and slow growth forecast among factors

- Sharon Salim Business Correspondent

The once-booming tech sector in Singapore has been hit hard by lay-offs in recent months, with some of the biggest names in the business axing jobs left, right and centre.

Earlier in October, consumer electronics giants Dyson and Samsung laid off an undisclosed number of workers in Singapore on the same day.

In July, fintech company MoneyHero laid off 80 staff as a cost-cutting measure. In the same month, logistics technology company Ninja Van sacked 5 per cent of its workforce in Singapore, before suspending operations of a subsidiary firm in Vietnam as it seeks to resolve issues over owed salaries and employee social insurance contributions.

The Straits Times explains why the lay-offs happened and what tech workers can do about it.

WHY ARE MORE TECH LAYOFFS HAPPENING?

Restructuring, rising employment cost and slow growth forecast are among factors leading to job cuts.

UOB senior economist Alvin Liew said the "earlier rounds of retrenchments" may have been caused by a combination of economic uncertainty, rising interest rates and cases of overhiring during the pandemic.

"But the underlying factors most likely have evolved due to the rise of the application of artificial intelligence (AI)," he noted, adding that the retrenchments have not been limited to Singapore and have been taking place in key global tech centres since 2022.

Mr Faiz Modak, associate director for tech and transformation at recruitment firm Robert Walters Singapore, said that while many firms "hired aggressively" after the Covid-19 recovery phase, the global market witnessed a slowdown in 2023.

Companies want to focus on profitability and productivity, so they are "consolidating their workforce with a right-sizing approach", he added.