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[SINGAPORE] Singapore’s employers may prefer contract employment for certain roles as they can cut headcount without the complexities of layoffs, human resource (HR) companies said.

Last month, DBS announced plans to cut about 4,000 contract and temporary staff over the next three years, with some roles being replaced by artificial intelligence (AI).

Contract hiring allows such large-scale headcount changes to be made without severance payouts, as firms have the flexibility to simply not renew contracts, said HR firms.

It is thus easier for companies to scale their workforce in response to business needs and economic conditions – a crucial ability to have amid growing uncertainty.

As confidence in the global economy has fallen in the past two years, companies seek a more “flexible approach to scale up and down certain transactional or day-to-day work”, said Greg Cazalis, principal consultant at recruitment agency Robert Walters Singapore.