Yeo Hiap Seng (Yeo) announced last Tuesday the layoff of 25 employees at its Sunoco facility in Singapore, following its decision to shift can manufacturing to Malaysia. The company confirmed that this decision is aimed at improving production efficiency and enhancing capacity utilization at its facilities in Johor and Selangor, Malaysia.
Yeo clarified that the Sunoco facility will remain a key center for the company, continuing to operate as a headquarters and cross-border logistics center, in addition to being a small production hub. The company also affirmed its full commitment to assist affected employees by providing support in job searching, career guidance, and psychological support.
Details of the Layoff
In an official statement, the company reported that it is working closely with the Food and Beverage Workers Union to ensure that the layoff and transition support package reflects its appreciation for the contributions of the affected employees. It noted that the affected employees will receive severance benefits aligned with their salaries and years of service, as agreed upon with the union.
It is worth noting that Yeo Hiap Seng recorded a net profit of S$21.1 million for the financial year ending December 31, 2025, up from S$6.9 million the previous year. However, the group’s revenues and core food and beverage revenues declined, reflecting a decrease in consumer spending and increased competition in key markets.
Background & Context
Founded in 1900, Yeo Hiap Seng is considered one of the leading food and beverage companies in Singapore. Over the years, the company has faced numerous challenges, including changing consumer consumption patterns and increasing economic pressures. In December 2024, the company laid off another 25 employees after the Swedish company Oatly decided to close its factory in Singapore, leading to a reduction in the number of employees hired to support Oatly's production.
In 2022, Yeo laid off 32 employees, representing less than 2% of its workforce of 1,900 at that time, citing increasing cost pressures and changes in retail conditions.
Impact & Consequences
The decision by Yeo Hiap Seng to move can manufacturing to Malaysia is part of a broader strategy to improve efficiency and reduce costs. However, this decision may negatively impact the affected employees and their families, raising questions about the future of the labor market in Singapore. This decision also reflects the challenges companies face in a changing economic environment, as they seek to balance efficiency and profitability.
This decision is likely to increase pressures on the labor market in Singapore, as affected employees will need to seek new job opportunities amid challenging economic conditions. Additionally, this move may lead to increased competition among companies in the region, as they strive to enhance their efficiency and reduce costs.
Regional Significance
Although this news pertains to a Singaporean company, it highlights the challenges faced by businesses worldwide, including Arab companies. Amid economic changes and increasing pressures, Arab companies may find themselves compelled to make similar decisions to improve efficiency and reduce costs.
This event also underscores the importance of adapting to market changes and the necessity of investing in skill development and capabilities among employees, which could enhance the competitiveness of Arab companies in the global market.