Neighbouring Country to Indonesia Hit by Wave of Mass Layoffs, Manufacturing and Retail Sectors Most Affected
Global economic pressures that have yet to fully subside are beginning to affect labour markets in various countries, including Indonesia’s neighbour, Malaysia. Geopolitical uncertainties, a slowdown in international trade, and business strategy adjustments have led many companies to opt for efficiency measures.
One of the most evident impacts is the rising number of redundancies in the early part of this year. The manufacturing, trade, and logistics sectors are the most vulnerable due to their heavy reliance on global demand.
According to VN Express, the number of workers laid off in Malaysia surged 47% year-on-year in the first quarter of 2026 to 24,100 people. This data was revealed in a report by Hong Leong Investment Bank, citing figures from the Social Security Organisation (SOCSO).
In the same period last year, the number of redundancies was recorded at around 16,500 cases. The highest layoffs occurred in January 2026 with approximately 10,700 cases. The figure then declined to 7,500 in February and 5,900 in March.
Although the trend began to ease towards the end of the quarter, the total number of redundancies remained significantly higher than the previous year. The manufacturing sector emerged as the most vulnerable segment due to its strong dependence on global trade and external demand.
In addition, workforce reductions also occurred extensively in the wholesale and retail sectors, as well as industries related to logistics. This situation indicates that economic restructuring is not confined to a single sector but is spreading across various business lines.
Hong Leong Investment Bank stated that this wave of layoffs was partly triggered by global economic uncertainties and geopolitical tensions, forcing companies to adjust their operational strategies.
The increasingly unstable business environment has compelled many companies to implement efficiency measures, including cutting workforce numbers.
Analysts also assess that major economic hubs such as Kuala Lumpur and Selangor are the first regions to feel the impact of corporate restructuring. Meanwhile, other states like Penang and Johor also face the risk of rising redundancies due to their reliance on export-based industries, particularly the electronics sector, which is highly sensitive to fluctuations in global technology demand.
Although the layoff figures have risen sharply, Malaysia’s labour market is still considered relatively stable. The unemployment rate has remained at 2.9% for four consecutive months.