Large-scale layoffs have continued in recent months, indicating ongoing economic challenges. Contributing factors include a decline in domestic purchasing power and growing external pressures, caused by the trade war.
As the job market remains uncertain, businesses are calling on the government to accelerate the development of a workforce better suited to meet both global and local demands.
BLEAK FUTURE
More manufacturers, especially those in the car and auto parts industries, are likely to lay off workers or close this year as they succumb to a plunge in domestic sales, worsened by the impact of the new tariff policy and trade war triggered by US President Donald Trump, said Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry.
More than 100 factories were shuttered monthly last year for the second year in a row, according to Kasikorn Research Center. This rate will certainly continue in 2025, said Mr Tanit.
"We should see a number of factory closures near the end of the second quarter," he said.
The shutdowns will mainly be in the automotive industry, which has experienced sluggish sales since 2023, said Mr Tanit.
Last year domestic vehicle sales plunged by 26.1% year-on-year due mainly to banks and financing companies' strict criteria for auto loans, concerned about non-performing loans given the high level of household debt, according to the Federation of Thai Industries (FTI).
"This is a very serious situation for automakers when one-fourth of total sales disappears," said Mr Tanit.
"Some auto manufacturers have avoided layoffs for two years, but they will let a number of workers go this year, with Trump's policy the catalyst."
Trump announced last month he would impose a 25% tariff on car imports on April 2, but the levy on shipments from Canada and Mexico was paused for one month after taking effect on March 4.
The FTI earlier warned of the negative impact on passenger cars and commercial motor vehicles exported to the US, while local auto parts makers are worried the new tariff policy will affect their exports to Japanese auto companies invested in Mexico.
"We also export auto parts to the US, especially tyres popular among American customers," he said.
Other industries, especially plastics, garments and furniture, will also be affected by Trump's tariff policy as the US-China trade war will worsen the influx of low-cost Chinese products, dealing a blow to local manufacturers and workers, warned the FTI.
Mr Tanit said he does not expect an alarming increase to the overall unemployment rate in Thailand this year. However, roughly 420,000 people will graduate from academic institutions this year, adding more pressure to job-seekers in a highly competitive labour market.
"We've been trapped at a low employment level for 10 years, stuck at this bottom level," he said.
(photo credit : Somchai Poomlard)
RESIDENTIAL SETBACK
Prasert Taedullayasatit, president of the Thai Condominium Association, said many residential developers have trimmed their organisations for a while based on weak market signals over the past few years.
"The layoffs this year stemmed from poor performance the previous year," he said.
"Reducing staff is one way to cut costs. Some companies reduced employees in investment businesses that did not meet expectations."
According to the 2024 financial statements of 24 listed developers primarily engaged in residential development, only three reported a year-on-year rise in net profit margin as a percentage of revenue, while 14 posted a decline and seven reported losses.
One of the two companies that were reported to have laid off up to 40% of their staff saw their net profit margins plummet, falling from more than 22% in 2023 to just 11% last year. Another firm experienced a nosedive from 8.9% to just 2.3%.
Mr Prasert, also chief operating officer of SET-listed Ananda Development, said it has frozen new hires for a while, and when employees leave it does not hire replacements.
Therdsak Thaveeteeratham, executive vice-president of Asia Plus Securities, said the layoffs by property developers are a response to the market slowdown.
"Layoffs are one strategy to cut costs and reduce expenses. There is no cause for concern," he said.
This strategy of managing costs through workforce reduction reflects how developers are adjusting to a challenging real estate market, focusing on operational efficiency during times of uncertainty.
Sutee Ketsiri, managing director of homebuilder Built To Build Group, said residential development has been unfavourable for two years, with a decline in sales prompting contractors to take on construction jobs from clients other than developers.
"The number of home construction jobs, even from large developers, has shrunk significantly, causing many contractors to increasingly take on self-built home jobs over the past year," he said.
DEMAND FOR AI SKILLS
Jackie Wang, country director of Google Thailand, said Thailand is experiencing a rapid technological shift across several industries.
While some jobs may evolve in response to the automation of certain tasks, the greater potential of artificial intelligence (AI) lies in augmenting skills humans perform well, she said.
AI can be leveraged to amplify human strengths in creativity, empathy and critical thinking at work, said Ms Wang.
"For the tech industry, we continue to see strong demand for roles specialising in AI development, cloud computing and cybersecurity, to name a few. At Google, we expect some headcount growth in 2025 in key investment areas, such as AI and cloud," she said.
Ms Wang said for students or those looking to prepare for the AI-driven future, foundational skills such as communication, problem solving and critical thinking will be even more important in this dynamic environment. People should also have a good understanding of AI tools, she said.
"We have recommended governments invest in building an AI-ready workforce by adapting skills programmes across sectors, developing national AI training and support programmes, and establishing public-private partnerships to scale these programmes and make them accessible to all workers," said Ms Wang.
"We are committed to working with partners on this issue. For instance, our digital training programme Samart Skills has trained 13,000 students and job-seekers in Thailand thus far."
She said over the past five years, Google trained more than 3.6 million Thais, including students, educators, small and medium-sized enterprises and developers.
"AI presents incredible opportunities for us to evolve and create a more productive and fulfilling work environment, while boosting local economic growth," said Ms Wang.
"I encourage people to approach AI with curiosity and optimism, and I am excited for the opportunities it will open up."
Prae Dumrongmongcolgul, country director of Facebook Thailand, said the integration of AI has revolutionised the IT industry, driving a significant surge in demand for professionals skilled in AI programming languages such as Python, machine learning, data engineering and data science.
This transformation is not unique to the IT industry, as AI has touched companies and organisations worldwide in different ways, she said.
"However, we believe human-AI collaboration remains crucial to advancing this technology. By showcasing how AI can augment human capabilities rather than replace them, we can unlock its full potential," said Ms Prae.
She said Meta has developed tools that enhance productivity, such as AI assistants that help write basic code blocks, allowing engineers to focus on more advanced tasks.
Ms Prae said rather than replacing jobs, AI supplements them, offering endless possibilities.
For example, AI can enhance medical diagnoses with accurate and efficient tools, or help business owners predict customer purchases, as well as create new professions, just as the internet gave rise to web development, she said.
"As technology evolves, jobs change and new ones emerge," said Ms Prae.
"Ultimately the future of work is not about replacement but augmentation, and we are committed to developing AI solutions that empower humans to achieve their full potential."
Somchai Sittichaisrichart, managing director of SiS Distribution (Thailand), said the local tech industry still faces a shortage of workers, particularly in cybersecurity, cloud and AI.
He said youngsters are not interested in learning tech skills, while emerging technology evolves all the time.
The tech industry will likely continue to face a worker shortage, said Mr Somchai.
Regarding concerns that AI will replace human workers in Thailand, he said it will not happen soon, but could start in two years.
Vatsun Thirapatarapong, country manager of Amazon Web Services (AWS) Thailand, said the tech industry has robust demand for people with AI skills, which should continue to increase.
AWS regularly updates courseware to train AI skills in the tech and non-tech sectors. The company aims to produce 100,000 AI-ready workers by 2026.
Maneerut Anulomsombut, chief executive of Sea (Thailand), a Singaporean internet tech firm, said the economic uncertainty is causing cautious talent acquisition among Thai companies, including those in the tech sector.
Every organisation prioritises recruiting individuals skilled in tech fields, she said.
A group of former employees of Alpha Spinning, AMC Spinning and Body Fashion (Thailand) staged a protest demanding the government urgently help laid-off workers last week. (photo credit: Chanat Katanyu)
ROBOTIC FLUENCY
Pun Paniangvait, general manager of Thai President Foods Plc, the manufacturer of Mama instant noodles, said the company expects to expand its workforce in line with the growth of its manufacturing operations.
The company employs more than 6,000 staff and consistently implements new technologies including robotics to reduce the workload in certain areas of production, such as heavy lifting of ingredients.
The use of robots lifts productivity and improves labour welfare, he said. For example, once the instant noodles are produced, robots handle the packing process and arrange the products on pallets, reducing the reliance on staff for various stages of production.
A typical production line now operates with about 25 workers, a decrease from 30 in years past.
The company also integrated AI to improve efficiency in administrative tasks such as summarising reports.
The use of labour-saving machinery could help the company remain resilient amid rising labour costs, said Mr Pun.
"The main goal is to keep the labour cost per unit of Mama manageable," he said. "By using labour-saving machinery, we can enhance worker productivity and potentially reduce the average labour cost per unit."
Mr Pun said the company usually raises the daily minimum wage annually, regardless of government policy.
He said the positions most often in demand are mechanics with vocational or higher vocational certificates who possess the skills and experience necessary to begin work immediately.
Mr Pun said the government should offer more support for vocational education.
Furthermore, he encouraged local businesses to collaborate with vocational colleges to provide on-the-job training, which could create a pool of skilled workers in specific areas and reduce labour migration to industrial cities such as Rayong.
This could increase economic growth in the provinces and distribute wealth across the country, said Mr Pun.
LABOUR SHORTAGE
Thaniwan Kulmongkol, president of the Thai Restaurant Association, said restaurant operators with sufficient resources are more inclined to invest in automation technologies.
She pointed to the rising trend of restaurants adopting self-service systems, like ordering through tablets or kiosks and implementing self-pickup stations. This shift not only decreases reliance on manpower, but also opens avenues for restaurant growth without the stress of workforce shortages, said Mrs Thaniwan.
There are still many opportunities within the restaurant industry to incorporate technology, especially in back-end systems that help with managing raw materials and calculating food costs, she said.
However, the industry will continue to hire staff, as the cost of implementing technology in restaurants remains high, said Mrs Thaniwan.
"Even in restaurants that embrace automation, there is still a need for employees to monitor these systems," she said. "Workers must develop the necessary skills to operate and maintain this technology."
Labour shortages are a persistent challenge for restaurants, leading some operators to offer daily wages that exceed the minimum wage, said Mrs Thaniwan.
Thai workers are often hesitant to accept jobs in restaurants based on the demanding nature of the work and relatively low wages, she said. In contrast, foreign workers are more willing to take these positions, as earning 10,000 baht is a substantial income for them, said Mrs Thaniwan.
She proposed restaurant operators restructure their pay systems to offer wages aligned with educational qualifications, though this may result in higher food prices.
Mrs Thaniwan emphasised the need for a significant overhaul of Thailand's educational system to ensure the workforce is equipped with the technological skills necessary for the evolving industry.
QUALITY OF EDUCATION
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said total employment tallied 40.1 million in 2024, including 19.5 million in services and trade, 11.8 million in agriculture and 8.72 million in manufacturing. The unemployment total is roughly 390,000.
Labour Ministry data indicates 19.2% of surveyed businesses, totalling 2,254 enterprises, are actively seeking workers.
The sectors with the highest demand include wholesale and retail trade, automotive and motorcycle repair services, accounting for 36% of demand from 812 enterprises; manufacturing comprised 17.9%, with 403 enterprises hiring; and construction, making up 11.3% or 254 enterprises.
Mr Sanan said the challenges include an ageing population, declining birth rates, low labour productivity, decreased worker skills, and a gap between labour market needs and worker quality.
"The quality of education, both formal and vocational, needs improvement," he said.
Given these challenges, the integration of AI in the workforce has become increasingly relevant, especially in the industrial and service sectors, said Mr Sanan. AI is recognised for its potential to enhance efficiency and reduce labour costs.
He pointed to China's initiative to introduce AI courses in primary and secondary education in Beijing, aimed at positioning the nation as a future technological superpower.
"This approach offers a valuable model for the Thai government to consider when formulating labour and education policies that can enhance Thailand's labour productivity in line with future demands," said Mr Sanan. "Establishing AI training institutes in provinces is an essential step to equip the future workforce."
Employers will continue to rely on human talent, as qualities like creativity, craftsmanship, effective communication and the ability to solve intricate problems remain beyond the reach of AI, he said.
A vendor sells lottery tickets on the sidewalk. As more new graduates are added to the labour market annually, employers are demanding tech prowess. Somchai Poomlard