Retrenchment goes way beyond just letting workers go.
For those affected, it spells not just a loss in livelihoods, but their sense of identity.
This is especially so for workers who have been part of a particular role and organisation for a long time. People often introduce themselves by what they do, and losing a job can feel like they are also losing part of who they are.
Furthermore, workplaces provide social connections and a sense of belonging, and retrenchments can disrupt that community, leaving workers feeling isolated.
While painful, retrenchment does not have to be destructive. When handled responsibly, it can safeguard the dignity of workers, maintain the company’s reputation, and help the company avoid any potential legal penalties.
The way companies manage retrenchment sends a strong signal about their values.
Employers who act with care, transparency and fairness demonstrate genuine commitment to their workforce, even in tough times.
In contrast, poorly managed retrenchments can result in reputational damage, lowered staff morale and even legal disputes.
Here are some reasons why employers ought to manage retrenchment responsibly.
In Singapore, the Ministry of Manpower (MOM) sets out clear guidelines for fair retrenchment practices.
Under the Tripartite Advisory on Mandatory Retrenchment Notifications, employers who fail to notify MOM within the required timeline may be fined up to $5,000.
Beyond complying with these guidelines, companies can also rely on their Collective Agreements (CA) with unions to ensure retrenchments are carried out fairly and responsibly.
A good example of this is Mediacorp’s recent retrenchment on 1 September 2025.
The company worked closely with the Singapore Union of Broadcasting Employees (SUBE) under its existing CA to ensure affected staff were treated fairly, and transition support was administered to help them secure new opportunities.
By working within the framework of the CA, Mediacorp was able to maintain industrial harmony, avoid protracted disputes, and preserve the trust of its remaining employees.
This helped Mediacorp safeguard its reputation as a responsible employer, negating any possible retrenchment disputes that may have resulted in the involvement of the Industrial Arbitration Court (IAC).
Workers who face retrenchment are at a vulnerable moment in their lives.
A responsible approach ensures they are treated with respect, given adequate notice, proper explanation and meaningful support to transition to new opportunities.
A good example of this would be Hotel Miramar Singapore.
Before the company announced its decision to cease operations on 29 August 2025, the company had already engaged with its union, the Food, Drinks and Allied Workers Union (FDAWU).
The company has extended its retrenchment package to employees under the re-employment scheme and agreed to provide ex gratia payments to those with less than two years of service.
FDAWU, together with NTUC’s e2i (Employment and Employability Institute), is currently working with Hotel Miramar to help all 108 employees secure new job opportunities and prepare for the next phase of their careers.
By upholding their workers’ dignity, Hotel Miramar is helping workers leave with their heads held high and preserving the goodwill and legacy of the brand that has lasted for almost 60 years.
Retrenchment affects not only those who are let go but those who remain as well.
Employees who witness their colleagues being treated callously are more likely to feel anxious, disengaged or even start seeking opportunities elsewhere.
Conversely, when workers see their peers being treated fairly, it reassures them that their employer does value its workforce, and that the decision to retrench was unlikely made on a whim.
And let us not forget that we are now living in an era where public perception shapes brand loyalty, so how a company handles retrenchment matters.
News of sudden layoffs without explanation can quickly spread online and damage a company’s corporate reputation.
Responsible retrenchment is not just about doing what is “nice”. It demonstrates corporate responsibility, and it enhances trust among customers, investors and future talent.
Responsible retrenchment requires deliberate planning and clear communication. Employers should:
You can refer to the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) website for more details on how to conduct fair and responsible retrenchment.
No employer has to navigate retrenchment alone. NTUC and its affiliated unions are key partners in ensuring workers receive the necessary assistance.
Unions can help mediate conversations, advise on fair practices and connect affected workers to career and training support through NTUC’s ecosystem.
By collaborating with NTUC, employers can ensure retrenchment exercises follow fair, transparent and consistent practices; provide affected workers with access to financial assistance schemes and employability programmes; maintain industrial harmony by fostering trust between management and workers.
When Jetstar Asia announced its plans to cease its operations on 11 June 2025, NTUC, The Singapore Manual & Mercantile Workers' Union (SMMWU), Civil Aviation Authority of Singapore (CAAS), and Jetstar Asia came together to help over 500 of the affected workers.
The result was a three-day job matching exercise in June at Jetstar Asia’s premises, which involved more than 450 job roles across 1,400 job vacancies.
In a recent update by NTUC Secretary-General Ng Chee Meng, he shared that 90 per cent of the affected pilots and cabin crew have since secured interviews or jobs with companies such as the Singapore Airlines (SIA) Group and Marina Bay Sands.
Retrenchment is never easy, but how it is carried out speaks volumes about an employer’s values and leadership.
Companies that approach it responsibly not only protect their workers’ dignity, but they also safeguard their own reputation, maintain staff morale, and strengthen long-term business resilience.
Mediacorp, Hotel Miramar and Jetstar Asia show that when employers work together with NTUC and its affiliated unions, they can turn a difficult exercise into one that provides meaningful support, practical solutions and hope for affected workers.
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