Firms reassess hiring in face of global headwinds

New Straits Times

17 hours ago

PETALING JAYA: From global corporations to Malaysian businesses, companies across industries are reevaluating their business models to navigate a rapidly changing global economy.
Firms are restructuring operations to adapt to shifting geopolitical landscapes, technological advancements, and evolving climate targets, according to FMT.
Malaysia has not been spared, with Goodyear, one of the world's largest tyre companies, shuttering its Malaysian operations as part of a global cost-cutting strategy.
Meanwhile, Astro Malaysia, the country's leading content and entertainment company, has introduced company-wide measures to streamline its operations in line with broader shifts seen globally across the media and technology sectors.
Why now? Three major trends are driving this wave of transformation.
Geopolitics, trade tensions force rethink
FMT said after years of globalisation, the pendulum is swinging back. Trade is being reshaped by geopolitics, with countries pushing to safeguard supply chains, even if it drives up costs.
The US has hiked tariffs on China and hinted at more restrictions affecting Southeast Asia. Despite holding steady thus far, Malaysia's electrical and electronics exports remain vulnerable to mounting geopolitical headwinds.
Meanwhile, businesses are streamlining supply chains to mitigate geopolitical risks. Friendshoring, or locating production in "friendly" countries, is on the rise, and Malaysia is benefiting.
"Intel, Infineon and Micron have all invested heavily in new chip facilities here. Even Chinese firms are shifting production to Malaysia to navigate US trade restrictions.
"But not all sectors are thriving. Semiconductor demand cooled last year after a pandemic-driven surge, prompting layoffs and hiring freezes in Penang's manufacturing corridors," the portal said.
The glove industry, a sector that boomed during the Covid-19 pandemic, also saw a downturn in 2023, leading Top Glove to shut down factories in China and Vietnam.
The tech industry has also seen significant workforce reductions. For instance, major Silicon Valley firms like Meta and Microsoft collectively laid off over 30,000 employees globally earlier this year - nearly 20,000 in the San Francisco Bay Area alone- as companies recalibrated after pandemic-era overhiring and shifted focus towards AI and automation. Similar cuts have also been felt closer to home, with layoffs impacting tech hubs in Singapore.
The portal said the retail sector is facing its own challenges, with projections indicating over 15,000 store closures in the US this year, potentially leading to more than 200,000 job losses, as consumer habits shift and economic pressures mount.
"Meanwhile, the automotive industry is undergoing significant restructuring. For example, Thyssenkrupp announced plans to cut around 1,800 jobs due to ongoing weakness in the automotive sector it supplies, citing declining production volumes and uncertainty due to potential new tariffs," it added.
For many businesses, this is what downsizing looks like: scaling back in markets promising lower returns and doubling down in areas with longer-term potential.
The energy transition
The shift toward cleaner energy is another major factor. As climate goals tighten, energy producers and heavy industries are changing how they operate, and who they hire, the portal said.
In Malaysia, government-linked companies Petronas and Tenaga Nasional are increasingly moving into renewables, areas that require different expertise and hence evolving headcount.
"The same story is playing out globally. Car makers are investing in electric vehicles and trimming roles tied to combustion engines. Power companies are moving from coal to solar and wind, prompting retraining and reorganisation.
"Malaysia's own energy roadmap calls for a pivot to low-carbon sources, bringing new jobs in solar, hydrogen and EV charging, while phasing out others."
To support this transition, the government and industry are investing in retraining programmes, helping oil and gas workers move into green tech.
But the clock is ticking. The companies acting now are those hoping to stay ahead of the curve, not get left behind.
Doing more with less: AI, digital transformation
In addition to responding to external shocks, companies are also pursuing greater productivity. Thanks to artificial intelligence (AI) and automation, many tasks, once performed by humans, are now handled by algorithms.
Meanwhile, local banks are grappling with tightening regulations and rising non-performing loans, forcing them to streamline branches and retrain staff for digital banking operations.
They are also increasingly using AI for customer service, reducing the need for large call centre teams, the portal said.
In retail, brick-and-mortar chains are closing storefronts amid fluctuations in consumer spending and the rise of e-commerce platforms like Amazon and Shopee, sparking realignments into logistics and digital marketing over in-person sales.
"The trend is global. A Bloomberg Intelligence report suggests up to 200,000 banking jobs worldwide could be lost to AI in the next five years.
In Malaysia, ByteDance, TikTok's parent company, cut hundreds of jobs last year from its KL moderation team, as AI tools replaced many human screeners."
Even startups are feeling the shift, the portal said. With investor money harder to come by, firms are prioritising lean teams supported by software tools.
Hiring has slowed, and many companies are discovering they can maintain output with fewer people, provided they're using the right tech.
For workers, this means reskilling is no longer optional. The most vulnerable roles are those that are easily automated. Developing tech fluency and adaptability is now the safest bet.
A new business mindset
All these moves, whether in response to geopolitics, AI or climate goals, reflect a broader shift in corporate thinking, the portal said. Companies are restructuring not because they're failing, but because they're evolving.
Global firms are recalibrating their operations, and Malaysian workers and businesses are part of that equation.
Some jobs will disappear while others will be transformed. But new roles will also be created, especially in sectors like advanced manufacturing, AI, and clean energy. The key is readiness. Those who anticipate change and adapt early will have the edge.
In a volatile global economy, staying competitive means knowing when to pivot. The companies doing that now are likely to be the ones still standing a decade from now.