Incorrect to claim 50,000 workers will be retrenched: Miti

KUALA LUMPUR: The claims by some quarters that 50,000 workers would be retrenched this year primarily due to the rising cost of doing business is incorrect, said the Ministry of International Trade and Industry (Miti).
Its minister, Datuk Seri Mustapa Mohamed said changes in technology and industrial structure which resulted in workers' displacement were features of the knowledge-driven economy, even in good times, and this was also true for Malaysia as the country transitions from labour-intensive to knowledge-driven economy.
"While there will be retrenchment, in our view most of those retrenched workers will be reemployed by new and expanding businesses and the total number of retrenchments this year may not be as high as claimed," Mustapa said in a statement today.
The statement was issued following the discussions on the cost of doing business and employment opportunities issues at the Cabinet Meeting and Economic Council Meeting last week, followed by a dialogue session with the Federation of Malaysian Manufacturers (FMM) and 21 of its members on January 8.
FMM President, Datuk Soh Thian Lai, gave a presentation on the challenges faced by industry and submitted some proposals in dealing with the issues.
Mustapa said the government considered industry players, big and small, as friends and that Miti had engaged them on a regular basis to enhance Malaysia's competitiveness as an investment destination.
He said Malaysia's sustainable economic growth — 5.9% in the first nine months of 2017 and forecast of around 5.0 to 5.5% in 2018, would have a positive impact on employment opportunities, including in new areas such as aerospace and digital economy.
"A total of 2.26 million jobs have been created under the Economic Transformation Programme so far, while a survey undertaken by SME Corporation in the third quarter of 2017 found that 40% of the small and medium enterprises (SMEs) interviewed are expecting their businesses to improve in the near term."
The government had been responding to the evolving human resource needs of industry by taking concerted steps to prepare the workforce to meet the changing nature of jobs, including strategies to upgrade skills and reskill the workforce, especially against the backdrop of megatrends such as Industry 4.0 and automation, said Mustapa.
"While we acknowledge there has been some retrenchment, we must also highlight that most of the workers who have been retrenched have been rehired by new and existing companies as they expand to meet increasing demand.
"For instance, a large percentage of the retrenched workers from companies such as Seagate, Hitachi Global Storage Technology and Rubicon in Penang have been absorbed by other firms which are expanding their operations such as Keysight, Inari, HP, Osram and Infineon," said Mustapa.
From 2014 to 2016, new manufacturing projects that were implemented had created over 153,000 jobs, and an additional 32,700 jobs in the manufacturing sector would be created from the investment secured in the January-September 2017 period.
Mustapa said a number of new investments and expansion undertaken by companies last year such as Broadcom and Osram in Penang, Konica Minolta in Malacca, Infineon in Kedah, Roland and IKEA in Selangor, as well as BMW in Johor, had created more jobs in the country.
Oil and gas companies were also starting to hire again, especially in the upstream and offshore businesses as they sought to capitalise on the higher oil price in recent times, he said.
"It is also important to note that as of the third quarter of 2017, the total employed persons had increased to 14.48 million from 14.42 million in the previous quarter," he added.
Another issue that was discussed during the dialogue was on the hiring of foreign labour.
"They continue to highlight the need to have a holistic review of policies on foreign labour, the need to enhance administrative efficiency and facilitation to promote a more conducive business environment," said Mustapa.
Moving forward, Miti will continue to engage the private sector to bridge the gap between their demands and the overall policies of the government.
"Our current unemployment rate of around 3.3% is the lowest in the region and is expected to remain stable. We believe that the implementation of sound macroeconomic policies, Budget 2018 proposals and the 11th Malaysia Plan, as well as strong exports and continued strong investment flows will generate more jobs in the country," said Mustapa. — Bernama