Singapore employers are becoming more cautious about hiring as businesses reassess how much they need to spend on people, technology and skills. Marsh Asia said employment expectations for the third quarter fell to 13%, the weakest reading since 2021, although the labour market remains relatively healthy, with unemployment at around 2% and retrenchments still low and stable.
Lewis Garrad, Workforce and Rewards Leader at Marsh Asia, described the change as a “recalibration rather than a retreat.” The argument is that businesses are not necessarily abandoning hiring; they are becoming more selective about where additional employees can create value. Companies are also using the period of softer hiring to identify skills they will need as technology changes how work is organized.
Is AI actually reducing hiring, or changing the jobs companies want?
The 13% employment outlook does not show that AI is replacing Singaporean workers by itself. What it does show is that companies are becoming more careful about adding headcount while they work out how technology will change the amount and type of work they need. Singapore already has relatively high individual AI adoption, but corporate adoption shows employees may use AI tools regularly without their employers redesigning entire workflows around them.
That distinction matters because AI can affect hiring without eliminating jobs outright. A company that previously needed several employees to handle research, reporting or routine administrative work may increasingly expect a smaller team equipped with AI tools to produce the same output. At the same time, demand can rise for workers who can manage AI systems, analyze their output or redesign business processes around them.
The result could be a labour market where headcount grows more slowly while the value expected from each employee rises.
Which Singapore industries are most exposed to the hiring changes?
The uneven outlook across industries suggests that AI and hiring will not move in the same direction everywhere. Manufacturing’s stronger employment expectations indicate that businesses still see room for workforce expansion, particularly where production, engineering and physical operations cannot easily be replaced by software. Finance and real estate face a different calculation because more of their work involves information, analysis and processes that can potentially be automated or accelerated by AI.
If AI improves productivity enough to support stronger revenue growth, hiring could eventually pick up again, but the jobs being created may look different from those lost or no longer needed. Singapore’s next employment cycle may therefore reveal whether AI is primarily a substitute for labour or a tool that allows businesses to expand with smaller, more specialized teams.
Meanwhile, most businesses in Singapore have assigned responsibility for artificial intelligence (AI) systems, but far fewer can actually show how those systems arrive at their decisions, according to a new report.
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