AI threatens 620,000 jobs in Malaysia: 10 sectors at risk

KUALA LUMPUR – Imagine a Malaysia where the streets buzz with self-driving vehicles, skyscrapers shine with solar panels, and jobs are defined not by titles but by skills.

In this futuristic landscape, the workforce faces stark choices: upskill to meet the demands of tomorrow, pivot to an adjacent industry, or risk obsolescence.

For many, the question isn’t if the wave of artificial intelligence, digitalisation, and green technologies will affect them – it’s when and how they’ll adapt to stay afloat.

Malaysia’s talent economy in transition

Recent findings (phase 1) by Talent Corporation Malaysia Berhad reveal a sobering reality: 620,000 jobs across 10 core sectors risk convergence or displacement in the next three to five years.

• Aerospace
• Chemicals
• Electrical & Electronics
• Energy & Power
• Food Manufacturing & Service
• Global Business Services
• ICT
• Medical Devices
• Pharmaceutical Manufacturing
• Wholesale & Retail Trade

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These sectors – which contributed a combined 60% or 933 billion ringgit to Malaysia’s GDP in 2023 – include aerospace, electrical and electronics (E&E), food manufacturing, and global business services.

Not all sectors will feel the impact of AI equally. Global business services topped the list of vulnerable sectors, with 32% of roles highly impacted by automation and AI.

Wholesale and retail trade, along with food manufacturing, also bear the brunt of upheaval due to their large, low-skilled workforces.

Meanwhile, aerospace and E&E sectors benefit from high barriers to automation, with their need for specialised knowledge providing a buffer against redundancy. Both have largely weathered the digital storm, thanks to specialised skills and regulatory oversight that insulate roles from AI disruption.

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The energy transition, for example, demands human oversight for safety and compliance, making complete automation impractical. Here, digital tools enhance productivity but don’t replace human roles – a subtle yet critical distinction.

The TalentCorp study, unveiled by HR Minister Steven Sim, categorises jobs into three impact levels:

Highly Impacted: At risk of being displaced or drastically altered.

Medium Impacted: Still relevant but requiring employees to stretch beyond their current capabilities.

Low Impacted: Needing continuous self-improvement to remain competitive.

Phase 2 of the study, which is set to be released in 2025, will add 12 more sectors.

The dawn of emerging roles

Out of the upheaval comes opportunity. The study identified 60 emerging job roles – 70% of which are tied to AI and digital transformation.

These include AI engineers, sustainability specialists, and bio-process engineers – roles critical for steering Malaysia into its green and digital future.

But the transition is not without hurdles. Sim underscored the urgency of equipping the workforce for these shifts: “By identifying critical skills and emerging roles, we empower Malaysians to adapt and lead globally, driving sustainable growth and resilience in our workforce.”

The government’s response to this paradigm shift is robust. The RM3 billion allocation under the Ministry of Human Resources, slated for 2025, aims to future-proof the workforce through levies, scholarships, and matching grants. Central to these efforts is MyMAHIR, a digital platform offering insights into job trends, skill gaps, and training opportunities.

MyMAHIR acts as a career compass, guiding employers, policymakers, and job seekers alike. It integrates data from TalentCorp’s findings to offer a clear roadmap for adapting to industrial changes.

“TalentCorp is working closely with industry stakeholders to ensure the Malaysian workforce remains adaptable,” said Thomas Mathew, Group CEO of TalentCorp.

“Through MyMAHIR and our initiatives including the Critical Occupations List and MyNext, we are addressing immediate and long-term needs, equipping Malaysians with skills critical to our economic and global competitiveness.”

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Reshaping Malaysia’s future of work

For employers and their workforce, the TalentCorp study paints a vision of a workforce that needs to act now if it hopes to survive this massive overhaul of the talent economy.

Achieving this requires bold moves: employers must invest in their teams, workers must embrace lifelong learning, and the government must foster an ecosystem that values adaptability.

The stakes couldn’t be higher for Malaysia, the findings of the study show. But the choice is clear: embrace change, upskill, and lead – or risk being left behind.