"Locals will bear the brunt of the cutbacks"
Linksys - Your post suggests you are well informed and have some substantiated knowledge? The 'alternative option' for expat Captains is probably SQ Cargo? that or leave.
Where is the excess manpower? sounds as though it may be in the F/O and S/O area in which case yes, locals will bear the brunt of the cutbacks, if SQ are short of or even have the right number of captains they are hardly likely to get rid of them if they have a surplus of F and S/Os that are not yet qualified for upgrade are they? Any locals that are retrenched will have the right, in law, to be re-employed as soon as conditions improve.
Perhaps you could enlarge on your statement that the locals will be the ones to go?