*Updated on 10 January 2018.
Datuk Seri Mustapa Mohamed, minister of the Ministry of International Trade and Industry (Miti) has commented on the concern over this year’s retrenchment issue.
“While there will be retrenchment, in our view most of those retrenched workers will be reemployed by new and expanding businesses and the total number of retrenchments this year may not be as high as claimed,” Mustapa said in a statement dated on 9 January 2018.
He also stated that with the sustainable economic growth in Malaysia, we will see a positive impact in the labour market with more job opportunities, especially in the aerospace and digital fields.
On top of that, the government has also been focusing on talent development to equip the workforce for the megatrends such as Industry 4.0 and automation. Therefore, despite the tumbling job market, retrenched workers will be rehired quickly as they continue to upgrade their skills.
The Sun Daily reported that 50,000 employees in Malaysia expected to lose their job in 2018 with the manufacturing sector being most affected, according to Malaysian Employers Federation executive director Datuk Shamsudin Baradan.
As of September 2016, the number of retrenched staffs already reached 37,699 individuals. This is due to the rising demand for foreign workers in comparison to the local job market, the automation trend as well as the revision in the minimum wage. Besides manufacturing, the pressure is also placed upon the finance, especially banking and insurance, and construction sectors.
Shamsudin commented: “many employers will be very cautious about hiring” in response to the rising of hiring costs.
“Multinational corporations involved in labour-intensive industries are also leaving due to higher wage cost in Malaysia”, he added.
However, the Employee Insurance Scheme (EIS), effective on January 1, will help the retrenched workers to cope with the financial burden as they seek new employment.