The low-key carnage of niche PH tech jobs
Credit to Author: Marlen V. Ronquillo| Date: Sat, 22 Feb 2020 17:05:53 +0000
Financial services giant Wells Fargo, for one reason or another, broke the pattern of silence on the technology employment front. Employers of Filipino tech workers — whether these are technology companies, multinational banks and financial institutions or other service-oriented entities with global operations — usually cut jobs, announce so-called job “redundancies” and “retirements” under an atmosphere of silence. Wells Fargo’s outlier move was to announce the mass layoff of its 700 Filipino tech workers, with a promise to pay them until the end of the year, probably to give them time to move into transition jobs.
Wells Fargo was both frank and straightforward. Through a spokesman, it said that all of the 700 Filipino technology jobs would be axed by the end of the year. All.
Of course, there is nothing new to Well Fargo’s mass layoff of its Filipino tech workers other than the decision to speak publicly about it and offer them full pay up to the end of the year. The cutting of niche technology jobs has been going on for quite some time.
Niche tech jobs in the country, especially the tech jobs that were categorized as “Regional Operating Headquarters” (ROHQ) tech jobs before the passage of the Tax Reform for Acceleration and Inclusion (Train) Act, are being moved into other global sites without much ado and much fanfare — the ironic offshoring of the jobs previously offshored to Manila.
These are mostly jobs in programming, automation and network engineering, the jobs that were called ROHQ jobs before the Train Law. They were called such because the jobs were held by tech workers with special, hard-to-find skills, and the regional headquarters of the global tech firms in the Philippines had been allowed by the Bureau of Internal Revenue, before the passage of the Train Law, to give these highly skilled workers a tax rate of 15 percent. The Train Law upped the rate to 25 percent. The minimum yearly salary of the ROHQ tech workers was P900,000 a year.
What is going on and why? Since we are not hearing anything from the Labor and Employment people, here is a brief backgrounder.
The reasons behind the mass layoff of Filipino tech workers were eminently captured in the Wells Fargo statement on the mass dismissal. Some jobs will be moved to India. Some jobs will have to be consolidated in specific sites in the United States. Small, inefficient sites will be closed down and the American workers in these small sites will have to move into the major sites. Or…. The “or” simply means that if you do not relocate to the major sites, you will lose you job.
The offshoring of the offshored jobs from Manila to India is, however, the most dominant reason for the loss of niche Filipino tech jobs. US-based technology companies, which offshored jobs to the Philippines in search of efficiency and lower operating costs two decades ago, are the ones doing the most of the relocation of tech jobs to India.
The main driver of the relocation is cost.
A highly skilled Filipino tech worker in automation, high-level programming and network engineering earns an average of P100,000 a month. The entry-level salary for India-based jobs of the same critical category is around P12,000 to P15,000 a month. It is usually an American of Indian descent who is high up in the hierarchy of US-based technology companies that announces the lay-off of the Philippine jobs. And the main pitch to the Filipino tech worker about to get the ax is this: Sorry, we can hire 10 India-based workers at that salary level.
Most of the time, there is a little ruse involved.
Before his or her dismissal, the highly skilled Filipino tech worker is asked to train batches of India-based on his or her job expertise. The training of the India-based workers normally takes a few months or a few weeks. For network engineering work, the highly skilled Filipino worker is sent to the many technology enclaves in India for the on-site training work, which normally takes a few weeks or a few months.
A month or so after his or her return home, he will be given the sad news of his dismissal.
The laid-off tech workers take things in stride, grounded as they are on the realities of job offshoring and the vagaries of globalization. They neither sue nor invoke Philippine labor laws to get compensation. The mass layoff was not a public thing until the Wells Fargo statement on the layoff of all its 700 Philippine-based tech jobs.
Are the Philippine government officials even aware of what is going on the tech front? In an ideal world, they should be concerned. The Philippine economy runs on two engines, two acronyms, really: OFWs and BPOs — overseas Filipino workers and business process outsourcing. Issues affecting the BPO front should be at the front, back and center of Philippine policy.
Knowing the realities of our underwhelming polity, the laid-off tech workers are not expecting anything from government. What with the Philippine leadership consumed with these priorities:
– Scrapping a television franchise
– Terminating the Visiting Forces Agreement
– Pandering to Philippine offshore gaming operators or POGOs (Exhibit A is the “pastillas” scam and the tax evasion which the government seems not to mind) and other Chinese interests
– Cluelessly dealing with a serious coronavirus outbreak
– Playing the flute as the African swine fever or ASF wipes out hog-producing centers across the country.
And one other thing. Seriously considering a military pivot to Putin and his thugs.
Wow. What a country.