Malaysia could see up to 697,000 jobs significantly affected by artificial intelligence, digitalisation and the green economy within three to five years if workers do not upgrade their skills, Human Resources Minister Datuk Seri R. Ramanan warned in Parliament on Wednesday. The alert comes as the country has already recorded 42,807 job losses between January and June 12, 2026, with 40.85% tied to business closures and downsizing.
A study by Talent Corporation Malaysia Berhad (TalentCorp) mapped how these forces are reshaping industries. Ramanan said 120 new roles have been identified as increasingly important, signalling where demand is shifting even as traditional positions come under pressure.
Where the job losses are concentrated
Kuala Lumpur recorded the highest number of job losses at 12,844, followed by Selangor with 12,360 and Johor with 3,468. The minister was responding to a question from Padang Serai MP Datuk Azman Nasrudin, who asked whether automation and AI were driving the current wave of retrenchments in the Klang Valley.
Ramanan pushed back against framing AI purely as a destroyer of jobs. "We believe AI is a catalyst for improving job quality and creating new high-skilled employment opportunities. We have taken a proactive and comprehensive approach to ensure a just transition for workers," he told the Dewan Rakyat.
Training infrastructure and funding commitments
Several programmes are already delivering results. More than 26,500 individuals were certified under the Accredited Programme Training System between January and May 2026. Another 2,506 individuals earned certifications through industry-led training programmes in the same period. The MyMahir platform now provides labour market intelligence on job roles, required skills and training pathways aligned with future demand.
The MyMahir SkillsLab programme includes AI modules designed to equip participants with skills that employers are starting to pay a premium for. Ramanan said graduates of the programme "are expected to secure employment with starting salaries between 5 to 15 per cent higher than the average entry level wage."
The Skills Development Fund Corporation (PTPK) has allocated RM100 million under a high-impact TVET financing scheme covering seven sectors, including AI. The programme targets 4,167 trainees, and 70 have already been approved for AI-related training.
The labour market picture behind the warnings
Despite the rise in retrenchments, the MYFutureJobs portal recorded 605,168 job vacancies over the same period, while total jobseekers stood at 188,062. The gap between vacancies and jobseekers suggests skills mismatches rather than a simple shortage of work. Ramanan said the government was prioritising reskilling and upskilling programmes for workers at risk of displacement, with a focus on identifying critical skills and emerging roles.
For HR leaders tracking how AI reshapes workforce planning, the TalentCorp findings offer a concrete baseline: 697,000 roles at risk and 120 new roles gaining importance. The challenge is translating those numbers into structured workforce transition plans before the window narrows.
Why this matters for human resources professionals
The minister's figures make workforce planning more urgent than theoretical. HR teams now have a clear, government-backed signal that upskilling budgets need to shift toward AI, digitalisation and green economy competencies. The 5-15% salary uplift tied to SkillsLab graduates also gives compensation teams a data point for benchmarking pay for reskilled hires. With RM100 million in TVET financing already flowing, HR departments that move early on AI training pathways will have an edge in both retention and talent attraction.
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