Malaysia recorded 5,900 job losses in March, a figure that, while lower than February’s 7,500, still reflects significant displacement across the workforce. 

According to data cited by Hong Leong Investment Bank, Selangor accounted for 29.3 percent of total loss of employment cases, followed by Kuala Lumpur at 25.6 percent. 

Combined, these two economic centres represented more than half of all layoffs nationwide, highlighting how employment risks remain concentrated in Malaysia’s most developed and business-heavy regions.

Job Losses: A Sharp Spike in the First Quarter

The moderation seen in March comes after a much sharper development earlier in the year. 

Malaysia recorded 24,100 retrenchments in the first quarter of 2026, marking a 47 percent increase compared to the same period last year. This sharp rise reflects a significant shift in labour market conditions within a short span of time.

The surge was largely driven by a spike in January, when layoffs reached 10,700, the highest level in recent months. This was followed by 7,500 in February and 5,900 in March, suggesting a gradual easing trend. 

However, despite this decline, overall retrenchment figures remain significantly elevated compared to 2025, when approximately 16,500 workers were laid off during the same three-month period.

Key Sectors Driving Job Losses

The job losses have been concentrated in manufacturing, wholesale and retail trade, as well as information and communication, sectors that play a critical role in Malaysia’s economic structure. 

These industries are closely tied to both domestic consumption and global demand, making them more vulnerable to shifts in economic conditions.

As companies in these sectors respond to cost pressures, changing demand patterns, and ongoing digital transformation, workforce adjustments have become more common. Retrenchments in these areas can also have wider ripple effects, affecting supply chains, service providers, and overall household income levels.

Stable Indicators Mask Ongoing Shifts

At the national level, headline labour market indicators continue to suggest stability. Malaysia’s unemployment rate has held at 2.9 percent for four consecutive months, while the number of unemployed persons declined by 4.9 percent year on year.

Labour force participation also remained unchanged at 70.9 percent, reflecting sustained engagement in the workforce.

However, these figures may not fully capture the underlying changes taking place. While the overall market appears stable, job losses, sectoral shifts, and workforce transitions are occurring simultaneously, creating a more complex employment landscape than the headline numbers suggest.

Rising Vacancies Point to a Changing Market

Despite ongoing layoffs, labour demand has shown resilience. Job vacancies increased to 107,000 in March, up from 96,500 previously, while employment edged up slightly across most sectors. This indicates that businesses are still hiring, even as others are reducing headcount.

According to Hong Leong Investment Bank, the labour market is expected to remain stable in the near term, supported by domestic demand and continued strength in electrical and electronics exports. 

However, the coexistence of rising vacancies and continued retrenchments points to a growing mismatch, suggesting that while opportunities exist, job security is becoming increasingly dependent on sector trends, skill alignment, and the ability to adapt to a shifting market.


Sources: 1| 2


Related articles:

70% of Malaysians Say They’re Happy at Work, But Behind It, Burnout Is Growing

Uncle Roger Is ‘Slimming Down’ Operations: What Went Wrong?