The government has told employers that when cutting back their workforce they must sack foreign workers first.

The ban is indefinite and will affect key manufacturing and service sectors, where half the workforce is foreign, although exemptions may be considered for highly skilled workers.

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Malaysia employs more than two million foreign workers, mainly from south-east Asian countries.

The move comes as 13,000 workers lost their jobs in the last quarter of 2008, three-quarters of which were Malaysian.