AI-driven layoffs could erode firms’ competitive edge: Jasmine Lau

Authorities are reviewing support gaps in the workforce support.

Companies that replace workers with artificial intelligence (AI) may lose their long-term competitive edge as these tools become widely accessible, according to Minister of State for Digital Development and Information and Education Jasmin Lau.

“Companies that benefit from AI should invest in their people, not just in technology,” Lau told Parliament on 6 May.

She said companies should train employees to use frontier AI tools, redesign jobs so workers can operate alongside the solution, and redeploy staff into new roles before considering retrenchments.

“The gains must not accrue only to those who have capital, advantages or access. They must translate into better wages, better opportunities, and greater security for all Singaporeans,” she added.

The speech comes as Singapore weighs the impact of AI adoption on employment, inequality, and productivity gains.

To manage workforce disruption, Lau said the government is expanding AI literacy programmes in schools and subsidising AI-related training for workers.

From the second half of the year, all institutes of higher learning will offer selected AI-related courses at significant discounts for alumni for up to one year after graduation.

Those who complete selected training courses will also receive six months of complimentary access to premium AI tools.

Meanwhile, authorities will review how workforce support is applied where gaps persist.

“We will discuss with tripartite partners on how this can be done fairly and effectively, in a way that incentivises companies to invest in training, job redesign, redeployment and placement,” Lau added.

Recently, the Ministry of Manpower, National Trades Union Congress, and Singapore National Employers Federation formed a Tripartite Jobs Council to support workers and businesses through the country’s AI transition.

The council will coordinate efforts across unions, employers and the government, complementing initiatives under the National AI Council.

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