Tiger Beer’s brewer, Asia Pacific Breweries Singapore, is phasing down large-scale brewing at its Tuas plant and moving production to Malaysia and Vietnam, cutting 130 jobs. Yeo Hiap Seng has shifted can manufacturing to Johor and Selangor, axing 25 workers in Singapore. H&M is relocating its Southeast Asia headquarters from Singapore to Kuala Lumpur, axing about 80 regional positions. ExxonMobil has sold off its entire network of 59 Esso petrol stations, is looking to close down for good one of its two Jurong Island steam crackers, and plans to cut its Singapore headcount by up to 15% by 2027.
The list goes on. Isetan closed its outlet at Nex mall in April, leaving just one store in Singapore. Even Big Tech has had enough. Amazon is winding down its Fresh grocery service and local fulfilment operations by July. Meta started notifying Singapore employees of layoffs at four in the morning.
These are not marginal players. They span petrochemicals, fast-moving consumer goods, fashion retail, F&B, and technology. What they share is a conclusion that Singapore has become too expensive to operate in for the value it returns. The city-state is extraordinarily good at attracting capital, but it’s becoming increasingly difficult to justify as a place to employ large numbers of people.
This is the paradox at the heart of Singapore’s economy in 2026. The stock market has never looked better, and the real economy has rarely looked more fragile.
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Whose rally is it?
The STI’s record-breaking run is real, but it’s also narrow. The three banks — DBS, United Overseas Bank and Oversea-Chinese Banking Corporation — account for more than half the index’s weighting. Their resilient earnings, swelling assets under management and generous dividends have almost single-handedly dragged the benchmark to historic highs.
Add in a resurgent REIT sector riding lower interest rates, and a defence giant like ST Engineering sitting on a record $34.5 billion order book, and you have the ingredients for a market rally that’s impressive on paper but highly concentrated in practice.
See also: Singapore firms feel energy cost squeeze, most hold off job cuts
The trading frenzy isn’t just about prices. Securities daily average value hit $2.1 billion in April, up 6% y-o-y, with trading in small- and mid-caps reaching its highest share of cash equities turnover since July 2021. In March, the figure was even higher: $2.4 billion, the most since October 2007, just before the Global Financial Crisis tore through markets worldwide.
Much of the excitement in the market over the past year or so can be pinned on the central bank’s $6.5 billion Equity Market Development Programme. Retail investors are piling in, driving a 20% m-o-m surge in turnover for lower liners in April. Assets under management across exchange-traded funds have crossed $20 billion. By every measure of market activity, Singapore’s bourse is experiencing its best moment in nearly two decades.
That said, the STI tracks the fortunes of capital — banks profiting from regional wealth flows, landlords collecting rent, defence firms benefiting from geopolitical anxiety — not the fortunes of ordinary workers. A family office managing billions of dollars doesn’t create thousands of jobs. Nor does an investment holding company. Nor does a data centre once it’s up and running.
A stock market can soar while the productive economy underneath it hollows out. The two are not the same thing. Conflating them is a mistake Singapore can’t afford to make.
The cost disease
Business closures in Singapore hit an eight-year high of more than 60,000 in 2025, and the trend has only accelerated into 2026. The reasons are well-documented: sky-high rents, a tight and expensive labour market, and operating costs that businesses across nearly every sector say are unsustainable. Energy prices, already elevated, surged further after the US-Israel attack on Iran on Feb 28 sent shockwaves through the Persian Gulf’s oil and gas trade.
For manufacturers, the arithmetic is brutal. Why pay Singapore wages and Singapore rents when the same bread can be baked, the same beverage cans filled, and the same beer brewed across the Causeway at a fraction of the cost? Gardenia will keep 250 employees in Singapore for brand management, innovation and distribution — the high-value work. But the jobs that kept the lights on for factory workers are gone.
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The same pattern is playing out at Yeo’s, Asia-Pacific Breweries and ExxonMobil. Singapore keeps the headquarters, the compliance teams, and the innovation labs, while Malaysia gets the jobs.
Even in retail and services, the picture is grim. Here, the question many Singaporeans are asking but few officials and landlords want to say aloud is this: When rents are this high and foot traffic this low, what’s the point of physical retail here?
The AI squeeze
For years, Singapore justified rising costs by arguing that it would move up the value chain. Lower-end manufacturing could leave as higher-value activities would come in. But that logic assumed the higher-value jobs would stay.
AI is now testing that assumption, not just on the factory floor. It’s beginning to erode the white-collar functions that Singapore spent decades positioning itself to attract. Marketing teams are shrinking. Coding tasks are increasingly automated. Customer service operations require fewer staff. Even legal, accounting and financial analysis work is becoming more machine-intensive.
The risk is no longer just that companies relocate jobs to cheaper countries. The risk is that the jobs disappear altogether. Meta’s 8,000 global job cuts, which hit Singapore on May 20, are explicitly framed as AI restructuring: traditional roles out, AI roles in, savings redirected into infrastructure.
Singapore’s government is acutely aware of the tension. Prime Minister Lawrence Wong used his Budget 2026 speech in February to make an extraordinary pledge: that growth powered by AI would not come at the expense of employment. The pledge was reinforced in Parliament in May, making Singapore arguably the first major Asian economy to explicitly commit to a policy of no jobless growth in the AI era.
It’s a laudable ambition, but also one that the current wave of exits and layoffs is already testing. The government’s Economic Strategy Review, released on May 13, acknowledged the need for so-called career bridges to help workers in at-risk roles transition to more resilient occupations.
The government has set aside over $400 million for workforce transformation and launched a Champions of AI programme to help leading firms become AI adoption role models for the rest of the economy. But programmes take years to bear fruit. The layoffs are happening now.
A tale of two Singapores
What we are witnessing is the emergence of two Singapores. One is the Singapore of capital: a US$645 billion stock market, record bank profits, a triple-A credit rating, and a gleaming roster of AI Centres of Excellence established by Google, Microsoft and their peers. This Singapore is thriving. It has never been more globally relevant or more attractive to investors seeking stability in a fractured world.
The other is the Singapore of labour: of retrenched factory workers, shuttered bakeries, vanished bubble tea chains, and retail staff watching the last stores close. This Singapore is being told to reskill, to adapt, to be agile, while the companies that employed them relocate to Johor, Kuala Lumpur or Ho Chi Minh City.
The younger workforce feels this acutely. Many entered adulthood believing Singapore’s meritocratic bargain still held: study hard, gain skills, secure stable professional employment, and enjoy upward mobility. But AI threatens to hollow out exactly the tier of mid-level professional jobs that underpins this social contract.
Business closures are at an eight-year high. Hiring sentiment across nearly every industry has turned negative. The government’s own surveys show virtually all businesses are less optimistic than they were at the start of the year.
The stock market doesn’t capture this dislocation. It never does. The STI’s 5,000-point milestone is a testament to Singapore’s strengths as a financial centre. But financial centres can flourish even as the broader economy sheds jobs, closes factories and watches its consumer brands leave. London proved this. New York proved this. Singapore is proving it now.
The question for policymakers is whether the no-jobless-growth pledge can hold up against reality. Costs are pushing manufacturers across the Causeway, AI is eliminating roles faster than new ones are being created, and a buoyant stock market risks masking the pain underneath. The STI breaking records doesn’t necessarily mean Singapore’s economy is healthy. If anything, it may suggest the opposite: that the gains are flowing to investors while the costs are being shouldered by workers.
Singapore has always been honest about its vulnerabilities: its lack of natural resources, ageing population and dependence on external demand. It’s time to be equally honest about a new one, that the country may be pricing itself out of the very productive economy it needs to keep its social compact intact.
