Job Cuts Ease To 5,900 But Selangor & KL Remain Retrenchment Hotspots

By Lara Kramer  •  15 Apr 2026 in News

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Selangor and Kuala Lumpur recorded the highest number of job losses in Malaysia in March, even as the national unemployment rate held steady.

A research note by Hong Leong Investment Bank (HLIB) found that Selangor made up 29.3% of total loss of employment (LOE) cases, while Kuala Lumpur accounted for 25.6%.

Malaysia recorded 5,900 retrenchments in March, a 21.3% drop from 7,500 in February. While the overall number of layoffs has declined, job cuts remain concentrated in key sectors such as manufacturing, wholesale, and retail trade, as well as information and communication.

Data from the Social Security Organisation suggests that the country’s main economic hubs continue to bear the brunt of retrenchments. HLIB identified manufacturing as the most vulnerable sector, citing its reliance on global demand and exposure to external trade pressures.

Despite this, there are signs of resilience in the labour market.

Job vacancies rose to 107,000 in March, up from 96,500 previously, indicating improving demand for workers. The unemployment rate held steady at 2.9% in February for the fourth consecutive month, while total employment edged up by 0.1%, supported by hiring across most sectors except mining.

On a year-on-year basis, unemployment declined by 4.9%, pointing to gradual improvement in labour market conditions. The labour force continued to expand, while participation remained unchanged at 70.9%.

HLIB noted that states with a high concentration of industrial and export-oriented activities tend to record higher layoffs. As Malaysia’s main commercial and industrial centres, Selangor, and Kuala Lumpur naturally account for a larger share of retrenchments due to their workforce size.

Outside the Klang Valley, Penang and Johor remain particularly exposed to external economic shifts.

Penang’s heavy reliance on the electrical and electronics sector makes it vulnerable to global tech slowdowns, while Johor faces risks linked to trade fluctuations and spillover effects from Singapore. Both states typically experience sharper labour market adjustments during periods of weakening global demand.

Looking ahead, HLIB expects Malaysia’s labour market to remain stable in the near term, supported by domestic demand and continued electrical and electronics exports. While an immediate deterioration is unlikely despite ongoing geopolitical tensions, the bank cautioned that downside risks remain in an increasingly uncertain global environment.

While sectors like services and construction continue to support hiring, export-driven industries, particularly manufacturing, remain exposed to external shocks.

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