Cost cuts hit 51% of firms as rental, manpower pressures mount

IWG says 54% intend to rely more on co-working networks in 2026 as expenses stay elevated.

More than half of Singapore firms have already rolled out cost-saving measures, whilst a growing share are turning to flexible work as a way to manage rising expenses, according to International Workplace Group (IWG).

The firm stated that 51% of Singapore companies have implemented cost-cutting measures, and 30% plan to introduce more flexible working arrangements.

Flexible work is now considered mainstream, with 81% of organisations in Singapore offering flexible options as of 2025.

This shift is taking place against a backdrop of 4.8% GDP growth in 2025, with Prime Minister Lawrence Wong cited as urging businesses to “rethink, reset and refresh” strategies to remain competitive, IWG said.

Manpower and rental costs were identified as the key pressures facing Singapore firms.

IWG positioned AI adoption and flexible work as major cost levers. It cited research suggesting AI can deliver 20–40% savings in operational costs, whilst flexible working models can reduce real estate costs by 55%.

It added that Singapore SMEs that implemented AI-powered solutions through the Productivity Solutions Grant achieved average cost savings of 52%.

Working across multiple locations is also becoming standard practice. 83% of CEOs now allow teams to work from more than one location, citing benefits such as shorter commutes (43%), wider talent pools, employee preference, productivity gains, and access to lower-cost locations (each 37%).

These trends are influencing office strategies for 2026. IWG said 56% of CEOs expect to seek shorter-term leases, whilst 54% plan to rely more on co-working solutions or memberships to networks of flexible workspaces.