Voon Shiak Ni
KUCHING (July 27): The federal government has been urged to address job retrenchment issues in the country where an estimated over 42,000 workers lost their jobs in the first half of this year.
Describing this number as alarming, social activist Voon Shiak Ni said such a situation raises concerns about conditions on the ground, requiring urgent attention.
According to her, the number of people losing their jobs climbed to 52,607 by mid-July and this increasing trend may continue.
“If the issue is not addressed promptly, the number of those losing their jobs may continue to soar and reach 100,000 this year.
“Workers aged 25 to 39 and high-skilled professionals bore a significant portion of the retrenchment impact with the hardest-hit areas in Kuala Lumpur and Selangor,” she said in a statement.
Voon opined that a lack of government support and structural policies implemented by the federal government could be leading to this problem.
“Many small and medium enterprises (SMEs) feel that current government assistance is not enough to help them offset rising operational costs with the price hike in almost everything,” she said.
She pointed out that with the minimum wage increment to RM1,700, many companies had been adversely affected by the additional financial burden, especially those with many workers.
She noted that the minimum wage, coupled with Employees’ Provident Fund (EPF), Social Security Organisation (Socso), and workers insurance contribution, will go up to nearly RM2,000 per worker.
Employers are also required to give the necessary increment for workers according to the number of years of service, she said.
“Although the minimum wage is a good policy for employees but the additional financial burden on private companies is not supported by government initiatives to ensure that the companies can afford the costs and will not lead to job layoffs.
“The Madani government raised the minimum wage to RM1,700 per month, implemented progressively starting Feb 1, 2025 (with full enforcement for small businesses taking effect on Aug 1 last year). Moving into mid-2026, Malaysia has observed a notable trend in retrenchments,” she said.
However, she added that minimum wage was not the only cause for retrenchments in the country.
She said many organisations such as the SME Association of Malaysia and the Malaysian Employers Federation (MEF) had argued that staffing and retention issues stemmed from several unresolved pressures, including escalating operational costs where global supply chain disruptions, energy price fluctuations, and local inflation had severely squeezed profit margins.
Given this, businesses find it difficult to self-fund competitive salary hikes to retain employees, she said.
To help resolve the matter, she suggested the government examine the root causes behind these retrenchments.
According to her, the government must find out if businesses were struggling with higher operating costs, weaker consumer demand, or changing market conditions before making hasty decisions on new policies that affect businesses.
She added that the government and policymakers should also closely engage with employers, industry groups, and workers to understand the challenges they face.
“Sustaining economic growth should go hand in hand with protecting employment opportunities, particularly for young Malaysians entering the workforce.
“Addressing the causes of retrenchments and supporting business competitiveness should remain a national priority,” she said.
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