Saturday, 24 January 2009

Philippine BPO industry ready to take in retrenched electronics workers

BusinessWorld Online

The local business process outsourcing (BPO) industry has the capacity to absorb displaced employees of shuttered semiconductor firms, industry leaders said yesterday.

In a briefing in Makati yesterday, the Business Processing Association of the Philippines (BPA/P) said the local BPO sector, which expects to grow by as much as 25% this year despite the economic downturn, has more than enough room to hire people who lose their jobs in the crisis.

"As long as they are willing, they can be hired," BPA/P Director for Industry Affairs Jonathan de Lazuriaga told reporters yesterday.

On Thursday, the world’s largest computer chip maker Intel Corp. announced that it would close down five of its plants around the world, including one in the Philippines which employs 1,800 people.

Mr. Lazuriaga said the economic slowdown has forced companies in the US which did not even entertain the thought of sub-contracting work to the Philippines before are now considering setting-up shop here to cut costs.

"Definitely, this is going to be a strong year for the BPO industry," he said.

BPA/P expects the industry to hire an additional 100,000 people this year, to bring the industry workforce to around 600,000. The BPO sector is also expected to rake in an estimated $9 billion in revenues this year from under $7 billion in 2008.

Not automatic

However, Mr. Lazuriaga admitted that not all employees from closed manufacturing firms may be immediately hired by BPO companies.

"Honest to goodness truth, there will be a little mismatch [in skills]," he said.

"The government needs to have re-skilling programs to make these people qualified for BPO companies," said Lauro Vives, Chief Executive Officer of information and communications technology advisory firm XMG, Inc.

He said around two-thirds of displaced employees from manufacturing firms may land jobs in the non-voice BPO sector, while the rest may be hired in regular call centers.

Meanwhile, US-based Citibank said it would expand its BPO presence in the country by as much as 20% this year.

Talking at the same briefing, Nigel Romano, Citibank North America chief financial officer said the company plans to hire as many as 400 employees this year, to add to the company’s current BPO workforce of 2,200 people.

Unexpectedly severe

In a separate briefing on Friday, the local unit of Intel Corp. said there was nothing the government could have done to avert the Cavite plant’s closure.

"Nobody knew the impact [of the crisis] would be so severe," Intel Technology Philippines, Inc. Corporate Communications Manager Arlita Narag said yesterday.

"If the global financial crisis did not happen, then things would have been different," she added.

The company earlier reported a 90% decline in net income in the fourth quarter of 2008 to $234 million from $2.3 billion in the same period last year.

She said the government had done its best in past years to address concerns the company had, particularly high power rates.

As early in the first half of last year, electricity rates in the country were twice as expensive as in China, where Intel also has manufacturing plants.

Ms. Narag also clarified that the company’s 1,800 employees were not notified of their plant’s closure via e-mail, as reported in some publications. Instead, she said the company had a series of meetings, which were attended by two top executives from the US, to notify the employees.

She said the company would gradually shut down its Cavite plan until the end of the year.

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