PLDT Eyes Outsourcing of IT Operations to IBM

PLDT Inc. is looking at the possibility of outsourcing its back office information technology (IT) operations to multinational firm International Business Machines Corp.

PLDT expects to save at least Php 7 billion from outsourcing with IBM within the next five years.

PLDT Chairman and CEO Manuel V. Pangilinan said the company was seeking to sign a memorandum of agreement with IBM by the end of June this year.

Around 1,000 employees may be affected by the outsourcing move of the telco firm.

“Just IT. And not all of the IT people will move to IBM. Some will be retained. We have to retain the so-called brains of the IT organization,” Pangilinan said in an interview with reporters on the sidelines of PLDT’s annual stockholders meeting Tuesday in Makati City.

“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.