“With the recent (announcement of) plans to close the Goodyear tyre factory, many Malaysians may fear that their jobs could be next. However, the Goodyear factory situation is more of a natural progression of things,” Bait Al-Amanah analyst Yugendran Sivakumaran told FMT.
He said labour and other costs are bound to increase as Malaysia develops. It is, therefore, natural for manufacturers to shift their operations to countries with cheaper cost structures.
“The NIMP framework should help alleviate this issue,” he added.
Launched on Sept 1 last year, the New Industrial Master Plan 2030 (NIMP) is a comprehensive policy framework launched by the government to transform the manufacturing sector.
One of its goals is to create high-value job opportunities, including in the technology sector.
Yugendran acknowledged that the technology sector has seen significant retrenchments in the US recently but believes Malaysia is unlikely to follow suit.
“The difference between the US and Malaysia is that, first off, during the pandemic, many tech companies in the US overextended and had huge rounds of hiring, and then when the Federal Reserve hikes came, they started retrenching as their costs increased,” he said.
However, Yugendran said Malaysia is unlikely to see a similar trend.
“Malaysia does not have an overabundance of graduates with degrees in the tech sector, and our interest rates have not been hiked over our standard pre-pandemic interest rates of 3%,” he said.
Last week, the statistics department announced that unemployment had dropped to 567,300 people (or 3.3%) in January, down marginally from 3.4% in the preceding month.
In a statement, the department described the economic situation in Malaysia as steady, with higher domestic demand anticipated amid a robust and stable job market, and supportive financial positions.
The department predicted that an increase in tourism activities will improve economic activity, allowing for the creation of various businesses and job opportunities.
Jobstreet Malaysia’s managing director Vic Sithasanan said he expects hospitality and tourism, retail and consumer products, and construction to drive economic growth.
“Despite the challenges posed by the pandemic, these industries have demonstrated remarkable resilience, providing a positive outlook for continued growth and recovery in the post-Covid landscape,” he told FMT.
Meanwhile HR consultant Srithren Krishnan foresees challenges in recruiting workers to fill certain vacant positions due to a migration of talent to countries that offer better-paying jobs.
“There has been a brain drain to Singapore ever since the country’s currency devalued. More and more skilled workers are seeking to work in Singapore, as most of them can take home an average of RM10,000 per month,” he told FMT.
Meanwhile, Malaysian Trades Union Congress (MTUC) president Effendy Abdul Ghani said the government has implemented several initiatives designed to help those who have been retrenched to get re-employed.
These include the establishment of employment centres and provision of job placement services to connect retrenched workers with job openings and providing financial assistance programmes to alleviate financial hardships.
“The government has offered incentives to employers to encourage them to hire retrenched workers such as wage subsidies, training grants and tax incentives designed to offset the costs associated with hiring and training new employees.
“Some initiatives focus on supporting retrenched workers in starting their businesses or pursuing entrepreneurship ventures,” he said.