Over 42,000 Malaysians Lost Jobs This Year, Business Closures Remain Biggest Driver of Retrenchments
KUALA LUMPUR: More than 42,000 workers across Malaysia have lost their jobs so far this year, with business shutdowns and workforce rationalisation emerging as the leading causes behind the wave of retrenchments recorded nationwide.
Human Resources Minister Datuk Seri R. Ramanan said data compiled by the Social Security Organisation (Socso) showed that 42,807 employees were affected between January and June 12, highlighting continued challenges faced by certain sectors of the economy.
According to him, business closures and company downsizing accounted for the largest share of retrenchments, affecting 17,485 workers or approximately 40.85 per cent of all reported job-loss cases during the period.
The federal capital recorded the highest number of affected workers, with 12,844 job losses, followed closely by Selangor with 12,360 cases. Johor ranked third, reporting 3,468 workers losing employment, representing about 8.1 per cent of the national total.
Ramanan was responding to questions regarding whether automation and artificial intelligence were contributing significantly to company closures and workforce reductions, particularly in the Klang Valley where a substantial portion of retrenchments has been recorded.
The minister stressed that current evidence does not support the view that AI is the primary cause of job displacement in Malaysia.
Instead, he said retrenchments are largely linked to business restructuring exercises, company closures, voluntary separation schemes and efforts by organisations to manage operating costs amid changing economic conditions.
“The perception that artificial intelligence is currently replacing workers on a massive scale is not reflected in the available data. The more pressing issue is ensuring that workers are equipped with the skills needed to adapt to technological change,” he said.
Ramanan noted that while AI and automation are reshaping industries globally, the immediate challenge for Malaysia is preparing workers for future employment requirements rather than treating technology as the main source of unemployment.
He added that strengthening workforce capabilities remains a key priority as digitalisation continues to transform business operations across multiple sectors.
Despite the reported retrenchments, the minister pointed out that labour demand remains relatively strong. Since January, more than 605,000 job vacancies have been advertised through the MYFutureJobs platform, compared with 188,062 registered job seekers, including those who recently lost employment.
The figures suggest that employment opportunities remain available, although skills mismatches continue to be a major obstacle for many job seekers attempting to re-enter the workforce.
At the same time, a TalentCorp study estimated that approximately 697,000 jobs could be affected by technological advancements and the transition towards a greener economy over the next three to five years if workers fail to upgrade their skills.
To address these challenges, the Human Resources Ministry is expanding various upskilling and reskilling initiatives, including the Scheme for Training and Upskilling for Employability (SLaPB) and the Academy in Industry (ADI) programme.
Additional support is being provided through the MyMAHIR.my platform and MyMahir SkillsLab, which incorporate digital and AI-related training modules aimed at helping workers remain competitive in a rapidly evolving job market.
Ramanan said these initiatives are essential to ensuring Malaysia develops a future-ready workforce capable of adapting to technological disruption while continuing to meet the needs of employers and emerging industries.
He emphasised that long-term workforce resilience will depend not only on job creation but also on continuous learning, adaptability and the ability to embrace new technologies as part of everyday work.
