Help sought for 889 laid-off BPO workers
By Jerome Aning
Philippine Daily Inquirer
First Posted 23:22:00 11/19/2008
Filed Under: Unemployment, business process outsourcing (BPO)
MANILA, Philippines—A moderate workers group called on the Department of Labor and Employment on Wednesday to attend to the nearly 900 workers laid off recently when a business process outsourcing (BPO) provider, Advanced Contact Solutions Inc. (ACS), lost a major US-based client that filed for bankruptcy.
TUCP secretary-general Ernesto Herrera said the DOLE, with the help of industry groups, should find ways to promptly redeploy the displaced employees to other BPO providers that have been enjoying brisk business despite the global financial crunch.
"The DOLE should ensure that the retrenched staff are absorbed right away by other firms, so as to lessen the potential severance of family income," Herrera said.
The former senator added that many BPO employees have been effectively supporting at least one household, and in some cases, up to two.
ACS is a subsidiary of Paxys Inc., whose shares are traded on the Philippine Stock Exchange. Paxys in turn is owned by Hong Kong-based All Asia Customer Services Holdings Ltd., which is also engaged in outsourced payroll processing and transcription.
ACS operates six contact centers with 7,118 seats located in Makati City, Quezon City, Lipa City and Cabuyao, Laguna. The centers handle inbound calls and electronic mail from customers and provide outbound telemarketing services.
ACS posted a net income of P203 million on revenues of P2.4 billion in 2007. From January to September this year, it had a net loss of P100 million on revenues of P1.48 billion.
The firm blamed the loss on "declining business volumes due to the ongoing US sub-prime financial crisis as well as customer concerns regarding a major US client which recently emerged from bankruptcy," according to Herrera.
ACS was referring to Plantation, Florida-based PRC, a teleservices firm. When it sought bankruptcy protection, PRC owed ACS a total of $14.8 million or P740 million. Instead of putting up its own call centers here to service the customers of its clients, PRC subcontracted the job to ACS.
Herrera said he did not consider ACS's decision to lay off one-fifth or 889 of its 4,205 employees as indicative of more turbulent times ahead for the local BPO industry.
"This is an extreme and exceptional case involving the loss of a key client that became insolvent. Other BPO providers here continue to grow their operations and recruit more workers, although at a much slower pace," said Herrera, former chairman of the Senate labor, employment and human resources development committee.
The militant group Partido ng Manggagawa (Workers’ Party), however, asked Congress to initiate a legislative inquiry into the effects of the ongoing global recession on the entire labor sector with rising reports of job layoffs and work rotation in export-oriented factories.
“The recession in the US and Japan, the two biggest economies in the world and the main market for our exports, spells double trouble for the Philippines ,” PM chair Renato Magtubo said in a statement.
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