BUSINESS locators at the Subic free port, particularly those in the manufacturing sector, are now digging in—cutting down on manpower costs, retooling operations to boost productivity and undertaking management reviews—all to fend off effects of the global recession.
Their cost-cutting measures, however, have already resulted in significant job losses, with 530 workers already retrenched and 4,365 placed on forced leave as of January 25, according to reports from the Subic Bay Metropolitan Authority (SBMA).
The SBMA update was the latest in a now-daily tally of shutdowns, retrenchments and other cost-cutting measures, often painful to workers, as Philippine businesses start feeling the impact of a global slowdown. Particularly hit were two key planks of the economy: the exports sector, specifically electronics, and the millions of overseas Filipino workers (OFWs), whose remittances have shored up the country for decades.
The latest bad news in the last week came from Apex Mining in Mindanao, where 150 workers were retrenched; Panasonic, which is cutting 60 jobs in the Philippines as part of a job-slash program for Asia; Intel, which is closing down its Philippine plant in Cavite, laying off 1,800 people; and Texas Instruments, where nearly 400 workers lost their jobs.
On Wednesday, Labor Secretary Marianito Roque told dwIZ’s Karambola hosts that 18,000 workers had so far been laid off since December and nearly twice that number were affected by various forms of cost-cutting moves: reduced work week, reduced work hours and reduced operations.
At the Subic Free Port, industry sources said the continuing job displacement could affect almost half of the 14,500 workers now employed in the manufacturing sector, who make up close to 17 percent of Subic’s 87,500-strong workforce.
Nidec hard-hit
The most number of job casualties were from Nidec Subic Philippines, one of Subic’s consistent top 10 exporters in the last few years, which already laid off some 600 workers as early as November last year.
The firm, which supplies hard-disk drives and motors to clients like Toshiba, Fujitsu, Samsung and Hitachi, used to employ a total of 3,140 workers in three shifts, said company president Toshihiko Miyabe.
However, Nidec’s cumulative worldwide operations output—the firm also operates in an industrial park in Laguna—has declined from 18 million units in 2007 to about 16 or 17 million last year as demand fell, Miyabe said.
Like Nidec, other electronics firms are poised to let go of more workers in the next few months due to an expected 2.2-percent cutback in world electronic equipment production this year, said Ronnie Yambao, head of the SBMA Investment Processing Department.
Forced leave
Sanyo Denki Philippines Inc., which manufactures cooling fans for computers, ATM machines and power supply packs, previously hired 2,284 personnel who worked in three shifts at Subic.
Now 1,200 of its workers have been put on forced leave this month, after production fell from 1.8 million units in 2007 to about 1.2 million in 2008.
The firm’s president and CEO Toshio Shinohara also told the SBMA in December that layoffs are “imminent” for this company, which counts on customers like Intel, Dell and IBM.
Other electronics firms hurting
Another firm affected by recession is Philippine Inter Electronics Corp., which sells diode components to Sony, Toshiba, Nintendo and Panasonic. Yambao said that due to a 30-percent decline in customer demand, the Japanese manufacturer “will resort to reducing manpower by 10 percent.”
Even Wistron Infocomm, the giant Taiwanese computer maker which has consistently topped Subic’s exporters list, is set to retrench 420 workers in February.
In face of massive job cuts in the free port, the SBMA announced a rescue plan, where displaced workers would be “reintegrated” into the economy through alternative livelihood programs.
This will provide workers with safety nets that would include a networking scheme and access to training, livelihood programs and related assistance.
Seipi not shocked
AS reports of closures and layoffs in electronics and semiconductors companies are filed daily, the head of the industry group remained unfazed, saying the job losses are “normal and should be expected” because of the global downturn.
“If it is happening in the United States, Japan, Europe and China, then you should not be surprised if it also happens here. What is happening in the country is not any worse than anywhere else,” said Arthur Tan, director of the Semiconductor and Electronics Industries of the Philippines Inc.
An official of the Chamber of Mines of the Philippines said the mining firms that have so far informed them of downsizing in operation and manpower are Atlas, Oceana and Platinum Group Metals Corp.
The official was surprised that Apex Mining was also affected because gold, the company’s output, is still commanding high prices in the world market at this time.
The BusinessMirror tried to get information from Panasonic Philippines but the company’s Filipino officials said they are “not in a position to say anything.”
Bloomberg, on the other hand, reported that Panasonic Philippine dry-cell batteries factory will lay off 60 workers. Tokyo-based spokesman Akira Kadota said the plant will be shut in March.
Layoff at Apex
Some 150 rank-and-file employees and managers were displaced by the manpower reduction program implemented by listed Apex Mining Co. Inc. at its Maco Mining Project in Compostela Valley, Mindanao.
In a statement to the stock exchange, Apex said the program was needed to “right-size its current personnel to sustain the economic viability of the mine project prelude to a full-swing productive operations.”
Majority of the expatriates have also been released, with only two remaining at the operation to finish their specialized technical work until they are replaced by their Filipino understudies.
OWWA aiding retrenched OFWs
Carmelita Dimzon, Overseas Workers Welfare Administration (OWWA) head, reported that as of January 18, the recorded number of retrenched OFWs back in the country by the OWWA was 4,042; and Dimzon projects this will run to 5,000 by the end of January.
OWWA, she said, will be profiling and mapping the skills of the retrenched workers, in preparation for a microbusiness training and loan package to ease the unemployment status for the thousands losing their overseas jobs.
The agency has signed the memorandum of agreement on the Filipino Expatriate livelihood fund, whereby P100 million from the P11-billion OWWA fund will be committed for the purpose. Loans of as much as P50,000 are payable in 24 months at 5-percent interest.
The OWWA regional units have been given marching orders and will be ready to implement or disburse funds soon, Dimzon said.
The Technical Education and Skills Development Authority (Tesda) is also offering training in preparation for opportunities in critical emerging industries, according to Marilyn Necessito of Tesda-Cordillera. There is a focus on training for call centers, which according to Dimzon is still a viable work opportunity.
Dimzon also said the Department of Trade and Industry has a program for those retrenched workers who want to go into business. ( Henry Empeño w/ M. de Leon, H. Reyes, M. Guieb, Business Mirror)
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