MANILA – PLDT is close to signing a deal with IBM to outsource its it needs in line with the telco’s manpower reduction scheme aimed to cut costs amid a dip in profits.
Company chair Manuel Pangilinan declined to cite how many of their IT personnel will be laid off, but said the outsourcing will amount to at least P7 billion in savings.
Pangilinan said a freeze on salary increases has also been in effect for the two years now to further lessen operational expenses.
PLDT is aiming to hit P21.5 billion in core income this year from P20.2 billion last year. The company is also targeting to sell off its remaining 25% share in Beacon Electric Holdings within the year to further shore up its balance sheet.
‘It is progressing reasonably well and we aim to sign the relevant agreements with them by the end of June,” Pangilinan said at the telco’s annual stockholders’meeting.
He said the move is “just IT-related and not all of the IT people will be moved to IBM; some will be retained. We need to retain the brains of the IT organization.”
“The cost reduction will be substantial in manpower, processes and applications will be less expensive for us,” he added.
PLDT will also reduce unnecessary expenses such as travels and attendance to seminars and symposia abroad, freeze on salary increases, etc. to cut on its operating costs.
“Everybody is pitching in terms of helping to reduce opex (operating expenses),” according to Pangilinan.
He also said that PLDT was eyeing to sell its remaining stake in Beacon Electric Assets Holdings Inc. within the year.
PLDT owns a 25 percent stake in Beacon after selling 25 percent to Metro Pacific Investment Corp. (MPIC). Beacon, in turn, owns 35 percent of Meralco.
PLDT’s net income in 2016 reached Php 27.9 billion, declining by 21 percent from Php 35.2 billion in 2015.
Its revenues likewise fell to Php 165.26 billion in 2016, from Php 171.10 billion in 2015. Its expenses jumped to Php 140.56 billion in 2016, from Php 139.27 billion in 2015. With PNA
