PETALING JAYA: Malaysia’s largest employers’ federation has warned that the 5% unemployment rate at the end of April is just the beginning of more job cuts.
The Malaysian Employers Federation (MEF) said up to 12% are expected to lose their jobs as the economy will remain “very weak” until the middle of next year.
MEF executive director Shamsuddin Bardan said that due to the weak domestic market, consumers would not want to spend money unless it is linked to food or health. “They are being cautious with their cash.”
He said employers would have no choice but to cut jobs as there was no money for them to sustain business. Some of them are in debt, he said.
Earlier today, the Statistics Department said Malaysia’s unemployment rate in April spiked to 5% as the number of people out of job went up to 778,800, or 48.8% over the same period a year ago.
Chief statistician Mohd Uzir Mahidin said the closure of operations for most businesses during the movement control order (MCO) resulted in the loss of employment, and job seekers could hardly find jobs.
Uzir said the most affected were those in the manufacturing and services sectors, especially accommodation and food and beverage; arts, entertainment and recreation; and other services such as beauty centres and salons.
Shamsuddin said the situation was the same globally, adding that most Malaysian suppliers have had their orders postponed since March.
“The demand is just so weak. Companies will have to cut their work force and this will last until mid-2021. The 5% unemployment rate is just the start,” he said.
He said companies which were doing well were those linked to food and health, including manufacturers of personal protective equipment (PPE), rubber gloves and face masks.
“Many will have to close shop unless they get aid from the government,” he said, adding that they needed protection against bankruptcy, and legal suits from employees.
He urged the government to continue subsidising salaries for workers, as is being done in Singapore and the United Kingdom, so companies will not have to close permanently.
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