Mohd Afzanizam Abdul Rashid, chief economist at Bank Islam Malaysia Bhd, agreed that unemployment would spike.
However, he said it would not increase as much as predicted by the Malaysian Institute of Economic Research (MIER).
“Businesses have been impacted by Covid-19, so naturally they will reduce their manpower to lower operation costs.
“But measures by the government to preserve the cash flow among small-medium enterprises (SMEs) and corporates may help mitigate the risk of higher retrenchment,” he told FMT.
Afzanizam said the Malaysian Employers Federation (MEF) had previously estimated some 100,000 job losses after the outbreak.
But even then, Afzanizam who last year predicted a “guarded” job market in 2020 said based on his conversations with MEF, the job loss estimates were “on the conservative side”.
He also said it would come as no surprise if more people became unemployed during this period, adding that tourism-related sectors, aviation and the manufacturing and services industries would likely see the highest retrenchment.
MIER, in a report yesterday, said the 2.4 million expected to lose their jobs would consist mainly of non-salaried workers with unskilled workers making up 67% of the number.
Its report came just before Putrajaya announced a two-week extension of the MCO until April 14.
Afzanizam said the measures taken by countries across the globe to contain the spread of Covid-19 would mean more gloom for the job market.
“What we are dealing with now is a virus pandemic that will bring the economy to a near-standstill,” he said.
Sam Haggag, the country manager for recruitment firm ManpowerGroup, said it was still too early to gauge the MCO’s impact on the job market.
However, he expects a significant impact on those employed at SMEs where much of the concern revolves around cash flow.
In other sectors such as e-commerce, he said, there is actually potential for growth as the restrictions of movement under the MCO are causing an increase in online shopping.
He said this trend would likely continue beyond the Covid-19 crisis and “ultimately create sustainable growth”.
He also said there are still vacancies in the job market for those who are open to starting a new career, including in a different industry.
“Opportunities for work will be there for those with an open mindset,” he said.
He added that the current crisis is forcing companies to rethink their plans and to become more creative about how to retain talent.
Companies that are more proactive in this would rebound the quickest, he said.
When asked if employers should rethink their workforce planning and provide more flexibility for their workers, he said this would be key to surviving the Covid-19 crisis and beyond.
CLICK HERE FOR THE LATEST DATA ON THE COVID-19 SITUATION IN MALAYSIA