How Should Workers Prepare? Facing Rising Layoffs, Frozen Wages, and Thailands Shift to Smaller Organizations
Thailand's labor market in 2026 is entering a major test. Recent data from Kasikorn Research Center reveals a startling figure: layoffs within the social security system (Section 33) are averaging no less than 40,000 workers per month.
This follows a previous year with total layoffs exceeding 530,000 people, an increase of 20%. This indicates that the reductions are not just temporary layoffs aligned with economic cycles but represent a "Structural Reset" of work arrangements that Thai workers face inevitably, as Thai businesses enter an era of "smaller organizations."
Beyond the clear layoff numbers, another phenomenon confirming that Thai companies are "downsizing" themselves is the freeze on hiring (Freeze Headcount) policy. Many offices now choose not to open new positions when employees resign, instead reallocating responsibilities among remaining staff.
The clearest sign of Lean Organization implementation is the proof that "fewer people still have to keep work running." Consequently, remaining employees must bear heavier workloads (multi-tasking) under limited resources.
The trend of "Peanut Butter" salary increases as companies strive to stay afloat.
Regarding compensation, salaried workers face the trend of Peanut Butter Spreading salary increases—distributing the raise budget evenly among all employees in small, equal proportions (e.g., 2-3%).
This strategy is used by companies to "control costs" and "reduce conflicts" during crises. Instead of investing heavily to attract or retain star employees as before, companies opt to maintain overall stability to keep the organization afloat amid energy crises and economic volatility.
Top 5 industries with the highest layoffs: who must urgently adapt?
Looking closely at the rising layoff statistics reveals key industries facing the hardest impact, with layoff proportions as follows:
- Manufacturing sector (24% share): Leading in layoffs, especially factories producing electrical appliances, electronics, and garments. They face two major challenges: losing competitiveness to cheaper foreign products and adopting automation systems that replace mass-level production labor.
- Wholesale and retail sector (12% share): As consumer behavior nearly fully shifts online, stores with many physical branches have become a "burden" rather than an "asset." Companies thus choose to close branches and reduce retail staff.
- Construction sector (9% share): Impacted by rising construction material costs linked to energy prices and household debt slowing property purchases, resulting in fewer new projects and halted hiring.
- Professional and technical activities (5% share): Despite requiring skills, the advance of Generative AI has begun replacing initial analysis, language translation, and basic graphic tasks. Organizations therefore employ fewer people who are better at collaborating with AI.
- Transportation and warehousing (4% share): Although e-commerce grows, energy costs from the global crisis force logistics companies to merge or implement automated warehouse management to reduce labor costs.
Why must Thai businesses "shrink"? Unveiling the strategy behind smaller organizations.
A deeper analysis reveals that the overall low-growth economy compels businesses to revise management models, accelerated by three overlapping crises:
- Cost crisis from geopolitics: Prolonged international conflicts cause volatile energy prices and logistics costs. Businesses can no longer bear large "fixed costs" such as high labor expenses. Downsizing (Rightsizing) thus becomes the primary choice to preserve cash flow.
- The golden age of AI and technological replacement: This year AI has evolved from a mere "assistant" to a full "doer." Over 80% of Thai organizations have begun automating routine, data analysis, and support tasks, reducing the need to hire large teams and leaving only small groups to oversee systems.
- Restructuring toward a "Lean Organization": The manufacturing sector (with the highest layoffs at 24%) and retail are shifting toward project-based employment or increased outsourcing to reduce long-term commitments and welfare costs, shrinking opportunities for salaried employees in large organizations.
Survival plan for salaried workers: how to cope when job security is uncertain.
Given the above, the key question is: when "risk" becomes part of working life, how should we protect and respond? The answer likely involves rigorous preparation both in "skills" and "financial" aspects to survive this crisis with stability.
1. Skills: Become "workers AI cannot replace."
- Skill-Based Hiring: Modern organizations hire based on "skills," not "positions." We must rapidly develop complex decision-making and people management skills, areas where AI is weak.
- AI Collaboration: Stop resisting and start using AI as a productivity tool. Those who can work faster and better with AI are most likely to be retained in smaller organizations.
2. Financial aspect: Build a stronger "defensive shield."
- Cash is King: Increase emergency savings goals from 6 to 12 months to accommodate longer job searches in a tight labor market.
- Financial Discipline: With high interest rates and living costs, reducing consumer debt immediately is essential to increase liquidity, and large long-term debts should be avoided unless absolutely necessary.
- Income Diversification: Do not rely on a single employer. Creating a second income stream from specialized skills serves as the best "cushion" when companies downsize.
The figure of 40,000 layoffs per month serves as a reminder that the traditional work model has ended. Thai businesses are transitioning to a "small but sharp" era relying heavily on technology. Salaried workers have no choice but to reset themselves before the system resets them out.
Sources: Kasikorn Research Center, jobsdb.com, Thai Financial Planners Association.
