In April, the Privatisation and Corporatisation Board (PCB) introduced a series of cost-cutting measures across State-Owned Enterprises (SOEs) in the Maldives, including a directive to reduce employee numbers by up to 33 percent. The policy reflects a broader push to contain public expenditure and improve operational efficiency within state-linked entities.
Authorities framed the measures against a backdrop of global economic volatility, including supply chain disruptions and rising fuel costs linked to geopolitical tensions. Given the Maldives’ heavy reliance on imported fuel and tourism-driven revenue, such external shocks continue to transmit quickly into domestic fiscal and economic conditions.
The restructuring drive has sharpened public concerns over job security in a labour market already characterised by reliance on government and SOE employment. For many Maldivians, the question has centred on whether public sector rationalisation will translate into widespread redundancies in an economy where alternative employment opportunities remain limited.
The issue of staffing levels in SOEs has also drawn attention to long-standing concerns over recruitment practices. Some state companies have faced scrutiny over historic hiring patterns, including politically influenced recruitment during election cycles, contributing to perceived inefficiencies and overstaffing in certain institutions.
Fenaka emerges as early test case for restructuring agenda
Fenaka Corporation has emerged as one of the most prominent examples of the ongoing restructuring drive. On Wednesday, the utility provider announced a voluntary resignation scheme as part of its broader cost-reduction strategy, following a special audit report released in September 2025 that raised concerns over governance and recruitment practices. Under the scheme, employees who choose to leave will receive compensation of up to four months’ salary. If sufficient numbers do not opt in, the company has indicated that it will proceed with targeted workforce rationalisation to align staffing levels with operational requirements.x
Fenaka currently employs around 8,000 staff and has described its restructuring as a process of “right-sizing”, aimed at matching human resources with actual service needs across its nationwide operations. The exercise includes reviewing departmental staffing structures and identifying positions considered non-essential to core service delivery.
Labour market data points to structural imbalances
Labour market data suggests that SOE restructuring will interact with an already complex employment landscape. The Labour Force Survey 2024–2025, covering the Greater Malé Area, estimated a working-age population of 188,062 people, of whom 144,328 were in the labour force. Of these, 141,039 were employed and 3,289 were unemployed, producing an overall unemployment rate of 2.3 percent.
The data highlights a significant disparity between Maldivian and foreign workers. Employment rates among foreign workers stand at 97.5 percent, compared with 64.5 percent for Maldivians. Foreign workers are also almost fully absorbed into employment, particularly in the secondary sector, where they account for a majority share of employment activity.
By contrast, Maldivians are more concentrated in the services sector, which accounts for 78.4 percent of employment in Malé City, while 21.4 percent work in the secondary sector. Employment in the primary sector remains minimal in the capital, as such activities are largely based in the atolls.
Gender and Age Gaps Remain Pronounced
Gender disparities also remain evident across the labour market. Overall employment ratios stand at 87.7 percent for men and 54 percent for women, with similar gaps observed among Maldivians. Among foreign workers, however, employment levels are significantly higher across both genders, reflecting stronger labour absorption in sectors dependent on migrant labour.
The survey also indicates that unemployment is largely concentrated among Maldivians, particularly younger age groups. Of the total unemployed population, nearly all are Maldivian, with higher rates recorded among those aged 15 to 34.
Labour Practices and Policy Tensions Shape Debate
At the same time, anecdotal perceptions around labour preferences continue to shape public debate. Employers and local stakeholders have frequently cited concerns over labour availability, attendance patterns, and willingness to undertake certain types of work among Maldivian employees, while also acknowledging the structural reliance on foreign labour in key sectors.
Policy discussions have also highlighted regulatory and cost differentials in employment practices. Labour protections, including statutory leave entitlements, apply primarily to Maldivian workers, while minimum wage provisions introduced in 2022 do not extend to foreign workers. These differences continue to influence hiring decisions in both the public and private sectors.
Against this backdrop, local authorities and political leaders have acknowledged operational challenges faced by businesses and vendors in maintaining staffing consistency, particularly in small-scale commercial operations. However, enforcement of labour regulations and compliance standards remains a recurring point of contention.
Structural Adjustment Raises Longer-Term Questions
As SOEs move ahead with workforce reductions and restructuring initiatives, the broader question remains how far the adjustments will reshape the Maldives’ labour market. While the policy direction aims to improve efficiency and reduce fiscal strain, it also raises structural concerns about employment absorption, wage dynamics and the long-term balance between local and foreign labour.
With further reductions anticipated across state-owned entities, the implications for Maldivian workers remain closely tied to the pace of private sector expansion and the economy’s capacity to generate alternative employment opportunities.
