It’s been rough waters in recent months for those working in the tech sector. Globally, tech giants like Meta, Amazon, Netflix, Tencent and Google have been letting employees go, citing various reasons such as slowing economies, over-hiring during the Covid-19 pandemic, inflation, or in Tencent’s case, China’s zero-Covid policies.
According to news sources, more than 88,000 workers in the US tech sector have been laid off in 2022. Unfortunately for Singapore tech workers, this trend has also made its way to our shores.
Singapore Manpower Minister Tan See Leng has said that there has been an increase in the number of retrenchments in our local tech sector, with 1,270 local workers let go from July to mid-November in 2022. These workers were from companies such as Twitter, Meta and Shopee, amongst others.
Minister Tan revealed these numbers during a session in Parliament in late November. Additionally, eight in 10 of these retrenchments were in non-tech roles such as sales, marketing and corporate functions, with seven in 10 aged 35 and below.
Tech retrenchments – why are they happening now?
Lawrence Young, the co-founder of the Human Resources and Finance Community (Singapore and ASEAN), shared with Workipedia by MyCareersFuture: “The current economic situation and the threat of a potential recession are caused by outside forces that are beyond the control of companies.
“With interest rates rising, lower consumer spending, the war in Ukraine, and inflation all coming together, tech companies that over-anticipated the surge of growth have had to scale back their expectations, and as such, their hiring and headcount numbers.”
How long will these tech retrenchments go on? It’s hard to say, and Lawrence believes there is now a need for tech companies to re-calibrate and exercise risk management to prepare for worst-case scenarios, given lower growth predictions.
While we tend to expect tech companies to be efficiently run, like their products and the algorithms that drive them, unfortunately, that’s not always the case.
When it comes to hiring, some employ “blocker” strategies, paying above market rate and giving benefits to hoard talent from competitors.
At the workplace, such hiring then leads to situations where such companies end up throwing more staff at problems than really needed, which adds complexity rather than solving the root issues.
As such, Lawrence believes “shedding employees and stopping or slowing down hiring is a requirement and a reaction to protect their core businesses and organisation.”
“A safe and conservative estimate would be 12 to 18 months for the tech market to stabilise.”
What have tech retrenchments been like?
How a retrenchment may proceed can take many forms: for some, it may be a quiet word with your manager, with agreements about how you’ll hand over your current tasks and a retrenchment package negotiated.
For others, it may be a far more impersonal experience. A staff or security may stand by your desk as you pack up your desk, waiting to escort you to a meeting room where your severance salary and any terms and conditions in an envelope waiting. All that’s left to do is to sign the forms and leave the building after.
Either way, whether the process is done with a gentle pat or a hard push, the end result is the same: your career with that company is over. The key thing is: what questions should you be asking at this point of time, and what to do next?
Are you entitled to any retrenchment benefits?
According to Clarence Ding, a partner at the law firm Simmons & Simmons, “There is no overarching law in Singapore that enshrines statutory protections for retrenched workers.”
He added to Channel NewsAsia: “The most that we have is Section 45 of the Employment Act 1968 and the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.”
The Employment Act is Singapore’s main labour legislation. Section 45 says that “no employee who has been in continuous service with an employer for less than two years is entitled to any retrenchment benefit”.
This applies to employees in non-managerial and non-executive roles whose salaries do not exceed S$2,600 a month and workmen whose salaries do not exceed S$4,500 a month.
According to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment issued by MOM, the National Trades Union Congress and the Singapore National Employers Federation, it is recommended that employers offer two weeks to a month of salary for each year of service for employees with at least two years’ service.
Employees who have worked a shorter period could be granted a voluntary goodwill payment, though this advice does not create any rights an employee can directly involve against an employer.
Unionised workers who are retrenched may also have recourse under a collective agreement. The union could also be notified of upcoming retrenchments and represent employees in any discussions with the employer.
What’s the minimum notice period you should get before being retrenched?
Singapore’s Employment Act stipulates the minimum period of notice to be given when terminating employees. It entitles employees to be served their contractual notice period or be paid salary in lieu of notice.
5 key steps to take after a retrenchment
Here’s also a quick checklist of what to do if the dreaded letter falls into your lap below:
- Take a deep breath, and manage your emotions
- It’s time to look at your finances
- Update your resume
- Start networking
- Get personal career guidance if you need it… fast!
Be positive, and pivot forward
Thankfully, one silver lining is that most tech workers who have been retrenched recently have been able to secure another job soon after.
Both tech and non-tech companies have been trying to tap the talent from these layoffs, which can be seen from reports of TikTok’s parent company ByteDance employing former Shopee staff.
In fact, Minister Tan revealed in Parliament that data showed the rate of re-entry into re-employment within six months after being let go for locals in the tech sector was higher than compared to the overall economy, for both tech and non-tech workers.
Retrenched non-tech workers are also being encouraged to look at career conversion programmes and skills upgrading to improve their opportunities of returning quickly to the workforce.
He concluded: “We are very, very careful of making sure that our Singapore core and our residents who are working here continue to possess the (relevant) skills and to keep ahead!”