Thai Businesses Under Pressure to Cut Costs as Economic Headwinds Mount
A prominent Thai economist identifies three major threats—the rise of AI, fierce competition, and e-commerce—as key drivers of corporate restructuring
- An economist identifies three primary pressures forcing Thai businesses to cut costs: the rise of artificial intelligence (AI), a global economic slowdown, and intensified competition from e-commerce.
- These pressures are compelling companies to restructure by reducing staff, adopting new technology for efficiency, and focusing on hiring tech-savvy talent.
- As a result, over 25% of Thai businesses are expected to reduce their full-time workforce, increasing their reliance on temporary, contractual, and part-time staff to lower costs.
A Thai economist has pinpointed three major factors forcing businesses to cut costs, leading to an increasing reliance on temporary and part-time staff.
Assoc Prof Dr Somjai Phagaphasvivat, an independent expert in economics and politics, identified the key pressures as artificial intelligence, intensifying competition, and the growth of e-commerce.
His analysis follows a report from the National Economic and Social Development Council (NESDC) which noted a significant shift in corporate employment models in the second quarter of 2025.
According to a 2024 Jobsdb survey cited by the NESDC, over 25 per cent of Thai businesses are likely to reduce their full-time workforce in favour of permanent part-time, as well as contractual or temporary part-time staff.
Speaking to the Thansettakij newspaper on Monday, Dr Somjai explained that the global economic landscape is being reshaped by three primary forces.
The first is the rise of AI. "The world is entering the age of AI," he said, citing the United States’ plan to establish a new government efficiency ministry to restructure and downsize its federal government using more AI technology.
This global trend, he argued, is forcing both public and private sectors to change their operations, reduce staff, and focus on hiring new, tech-savvy talent. Existing employees, he noted, will need to upskill to remain competitive.
The second factor is the economy, specifically the effects of “Trump's tariffs,” which are contributing to a global economic slowdown. This pressure is compelling companies worldwide to "trim the fat" and reduce overall expenditure.
The final issue is the sharp increase in competition, particularly in the e-commerce sector, where companies are battling on both quality and cost. To survive, businesses are cutting jobs and adopting new technologies to boost efficiency and lower costs.
"I believe these three factors are forcing businesses to restructure in order to reduce their organisational costs," Dr Somjai concluded.
