In Q2 2026, Singapore’s GDP rose 5.7% year‑on‑year, while manufacturing surged 12.2% year‑on‑year. This growth is primarily driven by an explosion of orders in semiconductors and precision engineering fuelled by the global AI chip boom.

While AI fuels rapid economic expansion, layoffs keep climbing. Singapore is witnessing a stark, instructive paradox.

In Q2 2026, Singapore’s GDP rose 5.7% year-on-year, and manufacturing surged 12.2% year-on-year. This growth is driven mainly by an explosion of semiconductor and precision-engineering orders spurred by the global AI chip boom.

Yet behind the glowing economic figures layoff statistics paint a sobering picture:

4,500 workers were made redundant in Singapore during the second quarter, hitting a more-than-five-year high. The redundancy rate rose from 1.6 per thousand to 1.9 per thousand, with cuts concentrated in outward-facing sectors directly benefiting from the AI wave, namely infocomm and manufacturing.

More notable is the structural reversal unfolding in the labour market:

The redundancy rate among degree-holding residents climbed to 3.1 per thousand. Among laid-off graduates, only 58.3% secured re-employment within six months — lower than the 69.4% re-employment rate for diploma holders.

Higher education is no longer an employment safety buffer. Workplace reshuffling brought by the AI era has reached highly skilled professionals.

Addressing this trend at the Forbes Global CEO Conference, Singapore Prime Minister Lawrence Wong restated his core thesis:

The explosive growth of artificial intelligence will not last forever, and the market will eventually undergo a correction. Policy aims to protect workers, not preserve every job.

This marks the third time he has publicly articulated this view within six months.

Back in February during the budget debate and at the May Labour Day rally, he repeatedly cautioned society:

Industry disruption from AI is inevitable. Some roles will disappear and many more will be reconfigured. The government cannot guarantee all jobs stay intact, but it will fully support every worker, helping individuals reskill and transition into new roles.

Many may wonder: given the AI boom, is AI directly causing mass layoffs? Research from Singapore’s Ministry of Manpower offers a different perspective.

Official data shows that 28.5% of local firms in Singapore had adopted AI by 2026. Adoption reaches 74.1% within the infocomm sector, 57.5% in professional services and 56.4% in finance and insurance. Only 6.2% of firms reduced headcount as a result of AI implementation.

Most companies are not simply replacing humans with machines, but reshaping job roles:

18.9% redesigned the functions of existing positions, and 13.9% created new AI-related roles.

At this stage, AI mostly transforms job tasks rather than eliminating jobs outright.

Layoffs stem more from corporate-wide business restructuring and cyclical swings in external markets. AI acts as an enabler of transformation, not the sole trigger for redundancies. The Ministry of Manpower notes that existing statistical tools struggle to isolate AI’s precise impact.

The broader labour market remains resilient. Singapore’s overall unemployment rate stood at 2.0% in June, resident unemployment at 2.9%, with 73,300 job vacancies. The number of openings exceeds the unemployed — a scenario of “more jobs than jobseekers”.

Rising redundancies amid prosperity are classic structural unemployment: the economy grows, old jobs vanish and new ones emerge, yet workers cannot upskill fast enough to match evolving role requirements.

Lawrence Wong’s remarks amount to a risk warning.

The world is currently harvesting AI dividends, but this period will not continue indefinitely. Once the boom fades and the industry enters a correction phase, job churn and business contraction will follow.

Rather than reacting passively once crisis strikes, governments should seize the window of strong economic growth to build transition pathways for workers.

Beneath the mantra “protect workers, not jobs” lies a pragmatic logic:

In times of technological disruption, forcing the preservation of outdated roles contradicts industrial trends and wastes societal resources.

Individuals cannot stop jobs from disappearing, but societies can protect people — through retraining, skill upgrading and job matching, so displaced workers can move into fresh opportunities.

This carries powerful lessons for all economies undergoing AI adoption.

1. AI does not equal mass unemployment, but it will inevitably restructure jobs

It is not a simple substitution of people. Many old tasks disappear while entirely new work requirements emerge. The real pressure comes from the “skill gap” between workers and available roles.

2. A university degree is no invulnerable shield

Singapore’s case demonstrates that highly educated professionals are also vulnerable to layoffs. If existing knowledge cannot integrate with AI tools, re-employment can become harder. The yardstick of workplace competitiveness is shifting from academic credentials toward tool proficiency and continuous learning capacity.

3. Boom periods are the best time to prepare

Do not wait for a downturn to start career transitions. Building skills during industry prosperity helps cushion volatility ahead.

On an individual level, “protect workers, not jobs” translates at the state level to stronger re-employment and training systems. For each of us, it means letting go of the expectation of holding one job for an entire career.

No role is permanently secure; only personal capabilities keep evolving.

Technological waves will not slow down. Jobs may disappear, but people can adapt and grow.