Up to 50,000 job losses expected this year

[ 25-03-2009 ]

Up to 50,000 job losses expected this year

PUTRAJAYA: Some 26,000 jobs have been lost in the country since the global financial crisis blew up last September and nearly twice as many jobs could be shed this year as struggling manufacturers cut output, a senior government official said.

"It (unemployment) is going to be quite long and badly affected," Human Resources Ministry deputy director of labour Sh Yahya Sh Mohamed said in an interview.

Malaysia lost 33,000 jobs in 2008, the bulk of them in the last few months as the global crisis worsened and Asia's key export markets in the West slipped into recession.

Some 40,000 to 50,000 more jobs are expected to be lost this year, Yahya said. But job cuts in the current downturn will not be as severe as during the 1997/98 Asian financial crisis, when Malaysia lost 84,000 jobs, he added. The figures do not include illegal workers in industries ranging from plantations to construction.

Deputy Prime Minister Datuk Seri Najib Razak said last week the unemployment rate will rise to 4.5% in 2009 from 3.7% last year. This amounts to nearly 500,000 unemployed in 2009, based on the latest third-quarter labour figures. Fourth-quarter numbers have not yet been published.

The unemployment rate, however, is relatively better than some others in the region like the Philippines, where the rate stood at 7.7% in January.

Of the nearly 26,000 jobs lost since October, 85% were in the manufacturing sector, Yahya said.

Flagging demand for electronics, which account for 40% of exports, has led several companies to announce job cuts. They include Flextronics International, Western Digital, Intel Corp and Panasonic Corp.

The government has announced various measures to prop up employment, but Yahya said foreigners would still be hired in the absence of local interest. There are currently nearly 2.1 million legal foreign workers.

The government has frozen foreign hiring, doubled the levy to engage a foreign worker and offered some incentives for local hiring.

Of the 25,961 people who lost their jobs since October, about 28% were foreigners. — Reuters

Source: http://www.theedgemalaysia.com/business-news/2115-up-to-50000-job-losses-expected-this-year.html