Global layoffs trend mirrors Thai business shake-up as workforce adapts to AI and economic risks

The global job market has faced turbulence in the first half of 2025, with numerous multinational companies announcing large-scale layoffs. Meanwhile, Thailand’s labour market is encountering its own challenges, driven by technological change—particularly the rise of AI—and economic pressures stemming from global trade tensions, which are expected to slow Thai exports in the second half of the year.

The National Economic and Social Development Council (NESDC) warned in its Q2 2025 report on Thailand’s social conditions that recent economic uncertainty has prompted organisations and businesses to shift from full-time permanent employment to contract and part-time work.

Some large firms have also begun offering early retirement schemes. For example, Kasikorn Bank launched a one-off 2025 programme called “Retire Early, Live Well”, allowing employees aged 45 and over to pursue alternative careers suited to their skills and interests.

NESDC has also been monitoring employment impacts arising from changes in U.S. import tariffs, which now impose a 19% retaliatory rate on Thai goods, alongside anti-circumvention measures and targeted duties on certain items. These policies have made Thai exports less competitive and affected employment levels and working hours.

Business closures have also increased: in the first seven months of 2025, 8,069 companies deregistered, including eight firms with registered capital exceeding 1 billion baht.

Major reshuffles leave unprepared workers behind

Rawit Hanutsaha, CEO of Srichand United Dispensary Ltd, said that with large companies reducing retirement ages for workers over 45, changes must occur on three levels. Nationally, Thailand must undertake concrete labour reforms similar to Singapore’s strategy a decade ago, addressing the high costs of employing 40–45-year-olds and aligning wages with productivity.

“The government needs to launch a major reskilling initiative as a national agenda, creating centres to support workers. For instance, a 51-year-old former taxi driver with mechanical skills could transition into electrical repairs, and a 52-year-old programmer could lead new projects. This helps accelerate systemic change,” he explained.

At the organisational level, companies must consider who will be affected by AI adoption, particularly if headcount is reduced. While short-term cost savings may occur, disruptions to population structure and income distribution could affect the wider economy. Large organisations are key drivers of this transformation.

At the individual level, retiring at 45 poses significant financial challenges for a lifespan potentially reaching 100. Workers are encouraged to plan for multiple careers and continue learning: “We must constantly learn with humility. Those in high positions must step down gracefully to allow forward progress. Maintaining motivation is crucial if the nation seeks meaningful change.”

Pongsuk Hiranprueck, founder and CEO of Show No Limit (BT Beartai), added that while government messaging often stresses “leaving no one behind,” in reality, not everyone can be ready at the same time, and some workers inevitably must be left behind for the country to progress into the new world.

Global trend focuses on workforce reduction

Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), said that labour costs typically account for 10-30% of total costs depending on the company. However, other costs—such as office rent, electricity and cleaning services—are often far higher and more flexible to reduce.

“Such adjustments are essentially about cutting unnecessary excess,” he said. “This is a global trend. In addition, worldwide regulations, such as U.S. tax policies, accelerate the need for countries to reduce costs. AI can replace many human roles, especially in administrative and management functions, such as secretarial work or repetitive admin tasks that previously required large numbers of staff.”

Thai businesses are now adapting and restructuring work processes to save costs, increasingly relying on modern technology, including AI and digital tools, which significantly reduce labour requirements.

However, this is only a first step, consistent with global expert predictions that hundreds of millions of jobs could eventually be displaced by AI. This trend is already evident abroad, particularly in the United States, where major firms have cut thousands of positions while replacing staff with AI systems.

Flexible work arrangements that emerged during the COVID‑19 era, such as working from home and project-based employment, further help companies reduce costs. This shift is expected to shrink office spaces in the future, as technology can replace many functions and online monitoring can verify whether employees are actually working. Reduced spending on office rent and overtime boosts efficiency and competitiveness.

Aging society and younger generations exacerbate labour shortages

Tanit Sorat, Vice President of the Employers’ Confederation of Thailand, said that Thailand’s economy remained stronger than expected in the first seven months of 2025. Unemployment is at a multi-year low, reflecting robust export activity. He warned, however, to watch from September onwards, when U.S. inventory depletion is expected to lead to a significant contraction in exports next year.

“During the first seven months of this year, the Thai economy remained stable, similar to the start of the year, with exports as a key pillar supporting employment,” he said. “Exports grew 14%, and the latest unemployment figures from the National Statistical Office were just 0.7%, very low compared with previous periods and last year, when it stood at 1%.”

Tanit pointed out that Thailand’s current picture is not of unemployment, but of a labour shortage. The Ministry of Labour is preparing to recruit foreign workers from Cambodia, Indonesia and the Philippines, while also allowing undocumented workers to register legally, signalling clearly that businesses need actual workers, not idle labour.

Moreover, the perception that employers are increasingly hiring part-time staff is misleading. Full-time positions are still in demand, but it is difficult to find workers due to younger generations’ preference for independent or freelance work rather than traditional full-time employment.

“Regardless of economic conditions, Thailand’s labour shortage remains a structural issue,” Tanit explained. “The country is moving towards an ageing society, the number of new graduates is declining each year, and the younger generation’s reluctance to take full-time positions will exacerbate the problem. Therefore, the solution is not about creating jobs, but about finding people to fill positions that remain vacant.”

Global eyes on second half of year as AI threatens jobs

The global job market experienced turbulence during the first half of 2025, as numerous multinational companies announced major layoffs in response to economic volatility and disruption across multiple industries. For example, Volkswagen, a cornerstone of Germany’s automotive sector, unveiled plans at the end of 2024 and began restructuring this year, with a plan to cut 35,000 jobs over five years.

Meanwhile, the Japanese carmaker Nissan Motor is also undergoing a major restructuring, planning to reduce its workforce by around 20,000 employees.

Even roles once considered secure, such as government jobs, have become precarious in the United States. The Department of Government Efficiency (DOGE)—a federal agency once overseen by Elon Musk, former close adviser to President Donald Trump—has implemented layoffs across federal offices nationwide. This measure aims to reduce expenditure and cut the U.S. budget deficit. According to The New York Times at the end of July, approximately 150,000 federal employees and civil servants accepted offers to leave their positions.

Looking ahead to the second half of 2025, the labour market—particularly in the U.S., which has already endured the strains of global trade wars—is beginning to exhibit signs of another pressing issue: the emergence of artificial intelligence (AI) as a workforce replacement.

The recruitment firm Challenger, Gray & Christmas recently reported that in the first seven months of 2025, the adoption of Generative AI in the private sector increased, creating more than 10,000 new AI-assisted roles, while AI itself emerged as one of the five primary factors driving layoffs this year.

Throughout July, companies in the U.S. announced over 806,000 private-sector job cuts, the highest total for that month since 2020, according to Challenger’s data.

The technology sector has been the hardest hit. Private firms cut more than 89,000 tech-related positions, an increase of 36% from the previous year, and since 2023, over 27,000 roles directly related to AI have already been eliminated.

“This industry is being transformed by AI advances and ongoing uncertainty regarding work visas, leading to reductions in staff numbers,” the Challenger report noted.

Meanwhile, Handshake, a job platform focused on Generation Z, revealed that the impact of AI on employment is likely most visible among younger workers. Entry-level positions, traditionally filled by recent graduates, fell by 15% last year, and the number of employers referencing “AI” in job descriptions rose by 400%.