Malaysia’s job outlook for the year 2018 might look bleak, as Malaysian Employers Federation (MEF) revealed that over 50,000 workers are expected to be laid off this year.

MEF executive director, Datuk Shamsudin Baradan said that manufacturing would be the main sector to be affected by the economic situation, followed by the services sectors such as insurance, banking and retail, as well as the construction sector. He said that the culmination of several factors will come into play, and thus hit the job market hard and make it more challenging.

Among the factors that will hurt the job market are the levy imposed on employers for hiring foreign workers and the Employee Insurance Scheme (EIS). Another factor would be the increasing number of days for maternity leave from 60 to 90 days, added with the possibility of paternity leave.

In 2016, statistics showed that a total 37,699 Malaysian employees were losing their jobs, while 38,499 were laid off in 2015. While the total job losses for the whole 2017 is yet to release, but it is known that 30,700 Malaysians were retrenched as of September last year, The Sun Daily reports.

Mr Baradan also said that the scheduled review of the minimum wage in July will also affect Malaysian employments.

“With the raising of the retirement age, those who were suppose to retire in 2013 will be doing so this year. But this may not open up the labour market as some employers may not want to incur additional cost by replacing those who are retiring,” he said. He added that owing to adverse factors, many employers will be very cautious about hiring new people.

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On the other hand, automation will continue to contribute to high job losses in 2018, as more companies turn to automation, rely on robotics, and information technology. 18,000 jobs were lost when banks adopted wider use of information technology in 2016. As the insurance industry is heading towards the same trend, Mr Baradan projected to see some substantial job losses.

He said, “Multinational corporations involved in labour-intensive industries are also leaving due to higher wage cost in Malaysia. They are moving to more attractive and lower labour cost nations where there are no high social costs.” He gave an example of Cambodia and Laos, where the wages are below US$100 per month compared to about US$250 in Malaysia.

Meanwhile, Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor said he was informed by the Labour Department that 30,000 to 50,000 people could be retrenched this year. Finance, construction, and manufacturing sectors will be at risk of affected by the condition.

Mr Mansor stated that should this happen, MTUC intends to ensure that all those laid off are given adequate compensation. Coming into force on Jan 1, the EIS will also help provide some relief to the retrenched workers.

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