PLDT to outsource IT operations to IBM to cut operating costs

PLDT anticipates over P7 billion in savings as it plans to outsource its back-office IT operations to IBM Philippines in the next five years.1 min


MANILA, Philippines — Over a thousand staffs could be affected by the PLDT Incorporated‘s shift to outsource its back-end information technology (IT) supervision to American multinational firm International Business Machines Corporation (IBM).

According to PLDT chairman, president, and CEO Manny V. Pangilinan, there are “more than 1,000” employees under the Philippines’ largest telecommunications and digital services company’s back-office IT operations.

According to PLDT chief finance officer Anabelle Chua, the telco and ISP provider don’t want disruption in their operations so they want to keep some of their key employee. Most of their IT is in National Capital Region (NCR).

PLDT has been trying in recent solar year to cut down its operating expenses – the main reason behind its shift to outsource its back-office IT to IBM.

This is part of PLDT’s efforts to reduce costs and expenses, which contributed to the company’s lower core net income of P27.9 billion in the previous year, down 21% from 2015.

PLDT reported that its revenues nosedived to P165.26 billion in 2016, as compared from P171.10 billion in 2015. Its expenses skyrocketed to P140.56 billion in 2016, from 139.27 billion in 2015.

The IT move to IBM, according to Pangilinan, is anticipated to allow PLDT “substantial” savings of more than P7 billion in the coming years.

“Profitability has been reset to a lower level, reflecting the impact of the changes in the business, our customer base, and our organization,” Manny V. Pangilinan said.

The savings will not just come from manpower expenses but also from IT processes and applications which are expected to become cheaper, as well as other costs related to the dynamic field.

Moving forward, the company is expecting a better financial performance outcome this 2017.

PLDT aims to close the 2017 with a higher recurring core net income of P21.5 billion, from P20.16 billion in 2016, primarily because of the anticipated acquisition of asset sales in Beacon Electric Asset Holdings Incorporated by the first half of 2017.

Manny V. Pangilinan also previously announced plans to sell the company’s remaining 25% stake in Beacon Electric Asset Holdings (Beacon), which currently holds a total of 35% stake in the Manila Electric Company (Meralco)

“We are in serious discussions with two potential buyers for asset sales stake in Beacon. The plan is to complete the sale of our remaining stake in Beacon in the course of the first half of this year,” MVP said.

In 2016, the telco sold 25% of its Beacon stake to another MVP-controlled company, Metro Pacific Investments Corporation (MPIC), for undisclosed amount. —

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Mark Julius

Originally from the Quezon City, Mark graduated from PUP with a B.S. in sports and video games. He served as Editor-in-Chief of The Pamantasan, the university newspaper, for a couple of years.