Thai Companies Slash Full Time Jobs as Economy Falters

Bangkok Business News: Surge in contract and part time employment

Thailand’s economic slowdown is reshaping the labour market as companies cut costs by reducing full time staff and replacing them with contract and part time workers. Danucha Pichayanan, Secretary General of the National Economic and Social Development Council (NESDC), revealed in the Q2 2025 social report that organisations are moving away from permanent employment to short term roles. In this Bangkok Business News report, surveys show permanent part time positions in medium and large firms rose from 6 percent to 42 percent between 2022 and 2024, while temporary contracts jumped from 4 percent to 28 percent.

Thai companies are retrenching staff and hiring part-timers to cut costs as the economy falters
Image Credit: AI-Generated

Rise of the gig economy and worker insecurity

The rapid expansion of the gig economy has fuelled this trend, with firms hiring workers on a per task basis to reduce financial risks. Increased technology adoption has also made it easier for businesses to rely on short term staff. Danucha warned that heavy reliance on contract workers could undermine job stability, weaken workers’ rights, and cut incomes, urging government action to strengthen protection for employees in a changing labour landscape.

Voluntary exits and early retirements

Companies are also offering voluntary exit programmes to employees aged 45 and above, replacing senior staff with lower paid hires. Danucha advised workers to be cautious when accepting such schemes, as the compensation often falls short of sustaining living costs until retirement age. He suggested options like small businesses or supplementary income streams to avoid long term hardship.

External pressures on jobs

The Thai labour market also faces international challenges. New US tariffs on Thai products, combined with tariff reductions on American imports, could weaken Thailand’s competitiveness and impact working hours and employment levels. On top of this, Cambodia has pressured many of its workers to return home, threatening shortages in agriculture, construction, and manufacturing. The Thai Cabinet has since approved recruiting migrant workers from Sri Lanka, Nepal, Indonesia, and the Philippines to help fill the gap.

Employment conditions and workplace hazards

NESDC reported 39.5 million employed in Q2 2025, with transport, hotels, and manufacturing showing slight gains, while construction and agriculture declined. Unemployment fell to 0.91 percent, yet underemployment grew to over 2.1 million. Workplace safety also remains a major concern, with research showing that even minor injuries can have devastating financial and psychological consequences. Employers are urged to improve safety standards, maintain equipment, and provide staff training.

Household debt and financial strain

Household debt remains a critical weakness in the economy, standing at 16.35 trillion baht or 87.4 percent of GDP in Q1 2025. Rising use of informal loans through mobile apps and buy now pay later schemes has created hidden risks. Danucha compared this to a ticking time bomb, noting that many loans exceed legal interest limits and lack regulation. He urged tighter oversight of cooperatives and lending platforms to avoid systemic financial problems.

KBank launches early retirement scheme

Kasikornbank (KBank) has introduced a rare early retirement programme targeting employees as young as 45, citing disruption caused by artificial intelligence. The scheme provides allowances of up to 12 months’ salary and includes retraining initiatives to help retirees return as financial advisors. Executives say the move will cut costs, improve efficiency, and prepare for competition from virtual banks.

Thailand’s employment landscape is entering a precarious phase. The sharp decline in full time roles, coupled with rising contract work, growing debt, and technological disruption, highlights the challenges ahead. Without firm policy measures and better worker protections, the shift away from permanent jobs could erode income security and weaken social stability for millions of Thai workers.

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