Bangladesh confronts a deepening jobs crisis in 2026, marked by private sector stagnation, mass layoffs in garments, and soaring youth unemployment, as political instability under the interim government hampers investment ahead of February elections.
In Dhaka, Bangladesh’s private sector, which employs 95 per cent of the workforce, has stalled amid plunging credit growth and factory closures, leaving millions without job security as the country heads into 2026 with elections scheduled for February, according to reports from The Business Standard and The Daily Star.
Private Sector Stagnation Fuels Jobs Crisis
Bangladesh’s job market has lost momentum, with credit growth hitting a four-year low, hindering private sector expansion and new hiring, as detailed by The Business Standard. The IT and manufacturing sectors have shrunk, leading to significant job losses, while businesses cut costs and halt expansion plans. In the garment industry, over 90 factories have closed due to labour unrest and violence, resulting in 50,000 job losses, according to GIS Reports Online.
As reported by Ayesha Kabir for The Business Standard, Fahim Mashroor, Managing Director of Bdjobs and former president of BASIS, stated: “We do not have exact data to determine the decline in employment opportunities. But overall, it can be said that the job market in the country has lost momentum, and there has been hardly any growth in the last six months due to a lack of new investment.”
Political Uncertainty and Economic Inheritance Weigh on Recovery
More than a year after student-led protests ousted former Prime Minister Sheikh Hasina Wajed, the interim government led by Dr Muhammad Yunus struggles to stabilise the economy amid political polarisation and protests in Dhaka, as covered by GIS Reports Online. Foreign direct investment dropped nearly 50 per cent in the first quarter of 2025 compared to the previous year, while high inflation and declining real wages exacerbate disparities. Army chief General Waker-Uz-Zaman described the country as passing through a “chaotic phase” in a speech that pressured the government to set an election date.
Youth Unemployment Reaches Critical Levels
A World Bank report published in October 2024, titled Bangladesh Development Update, revealed that joblessness among tertiary-educated youth rose to 27.8 per cent of the unemployed in 2022, up from 9.7 per cent in 2013, according to The Business Standard. Overall unemployment stands at 2.66 million, with underemployment affecting an additional 10 million people, as reported by Dhaka Tribune. Fahim Mashroor noted that more than 20,000 IT graduates enter the market annually, but the industry absorbs fewer than half. In the software sector, job postings fell to 70,000-80,000 as government procurement halted and private investment paused.
Recent Unrest Compounds Job Market Woes
The death of youth leader Sharif Usman Hadi, a prominent figure from the 2024 student protests against job quotas, has intensified political crisis, sparking violence, arson, and media attacks, according to Dainik Jagran and TOI Bharat. Bangladeshi journalist Muktadir Rashid described the situation as “very fluid” ahead of February 2026 elections, warning that failure to hold them could spell disaster for Bangladesh and the region. The unrest follows protests against symbols of the Hasina regime and places the Yunus administration under scrutiny, with Dr Yunus declaring a national day of mourning and ruling out contesting elections.
Factory closures, layoffs, and stalled investment signal no immediate recovery for Bangladesh’s job market, with overall unemployment at 2.66 million, underemployment at 10 million, and youth joblessness surging, as documented across The Daily Star, The Business Standard, GIS Reports Online, and Dhaka Tribune.
