ST Explains: Why are tech companies in S’pore laying off people, and is it going to stop?

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The once-booming tech sector here has been hit hard by lay-offs in recent months.

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

Companies want to focus on profitability and productivity, so they are “consolidating their workforce with a right-sizing approach”, he added.The landscape has changed, said CGS International economic adviser Song Seng Wun. He said when companies stop making money on a particular product, coupled with pressure from board members and shareholders, it makes a case for cutting certain divisions and finding something new. “So it’s very brutal in that sense.”

“We have also witnessed some software engineering functions being impacted at tech start-ups as funding from venture capitals have been conservative. As a result, the start-ups are focusing on generating profits to encourage further rounds of investment,” he added. Mr Song also highlighted that while there are job losses, new jobs are being created: “Those who are doing well and holding up to the challenge are hiring.”

 

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