Total employment in Singapore fell by 6,800 in the first quarter of 2017 — the largest quarterly contraction in nearly eight years as businesses in the city state restructure to reduce their reliance on manpower.

The fall was due to a reduction in foreign workforce, Singapore’s Manpower Ministry said Tuesday.

“The decline reflected a reduction in the foreign workforce, mainly due to a decrease in Work Permit Holders in Manufacturing and Construction, a result of low oil prices and continued weakness in private sector construction activity respectively,” the Ministry said in a statement.

Singapore’s unemployment rate in the first quarter was 2.2 percent, lower than the Manpower Ministry’s preliminary estimate of 2.3 percent and unchanged from the fourth quarter of 2016. The last time the city state’s jobless rate was above 2.2 percent was the fourth quarter of 2009.

Singapore’s slowing economy and efforts to restructure into a productivity-led growth model have taken a toll on job seekers, who are taking longer to land jobs.

The city state has relied on a large pool of foreign workers to power its economic expansion in its early years of independence but focus has shifted to adopting technology and innovation to drive growth.

Michael Smith, managing director of Randstad Singapore, Hong Kong and Malaysia, told CNBC’s “Street Signs” that the hospitality, construction and manufacturing have been the harder hit sectors. A recent Randstad survey found that one in five workers in Singapore fear they could lose their jobs to automation.

“On a broader sense, organizations are being excited about the potential that robotization, automation and artificial intelligence can provide to increase productivity but they also struggle with ‘how I should retain my workforce to make sure that those individuals have the skills to add value to my customer base in the future’,” said Smith.

“From the Singapore perspective, we’re going through some structural pain at the moment but I believe Singapore has made some very strategic choices on how to remain a global player.”

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