Moves to restructure Shanghai's inefficient state sector threw 395,000 people out of work last year, although more than half managed to find new employment.
Shanghai Statistics Bureau deputy director Wu Zhenguo said the figure included 108,000 workers who lost their jobs the previous year and were being retrained for alternative employment.
The city's massive retrenchments mirror a national policy of shedding surplus workers in bloated state enterprises to make them more competitive, as the country paves the way for entry into the World Trade Organisation.
'We were able to find 232,000 jobs for the retrenched, which means the re-employment rate was 58.7 per cent,' Mr Wu said.
Bureau director Pan Jianxin said the city government would hold a meeting today to work out better ways to retrain those laid off for alternative employment.
The city government retains control over the number of people to be retrenched each year by the collective and state sectors to ensure the scale is not socially threatening.
'There is an overall control on the number to be retrenched, even as we strengthen efforts to improve the re-employment initiative,' Mr Wu said.