The number of workers laid off in Malaysia soared 47% year-on-year to 24,100 in the first quarter of 2026.
Job losses peaked in January with around 10,700 cases before easing to 7,500 in February and 5,900 in March, according to a report by Hong Leong Investment Bank, which is based on data from the Social Security Organisation.
Despite the slowdown toward the end of the quarter, the total remained much higher than the roughly 16,500 layoffs recorded in the same period last year.
The manufacturing sector was the most vulnerable segment due to its heavy reliance on global trade and external demand. Job cuts were also concentrated in wholesale and retail as well as logistics-related sectors, signaling broader economic restructuring.
The bank said the wave of layoffs was partly driven by global economic uncertainties and geopolitical tensions, which have forced businesses to adjust to an increasingly volatile operating environment.
Analysts said major economic hubs such as Kuala Lumpur and Selangor are often the first to feel the impact of corporate restructuring. Other states like Penang and Johor also face rising risks due to their dependence on export-oriented industries, particularly the electronics sector, which is sensitive to fluctuations in global technology demand.
A general view of city skyline including Malaysia’s landmark Petronas Twin Towers in Kuala Lumpur, Malaysia, Feb. 3, 2023. Photo by Reuters |
Despite the increase in layoffs, Malaysia’s labor market has remained relatively stable, with the unemployment rate holding steady at 2.9% for four consecutive months, indicating that some displaced workers have been absorbed by other sectors.
Hiring activity also remains robust, with about 107,000 job vacancies recorded in March, mainly in the services and construction sectors.
However, analysts warned that downside risks persist, particularly for export-oriented industries that remain vulnerable to external shocks in the months ahead.
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