Slowdown epidemic spreads; 300,000 layoffs seen

Published by rudy Date posted on January 29, 2009

More companies in the electronics sector announced cutback plans yesterday while the Department of Labor and Employment (DoLE) estimates up to 300,000 persons could lose their jobs over the next six months as the global financial crisis deepens.

Data from the Subic Bay Metropolitan Authority (SBMA) labor department said 22 companies, mostly in electronics manufacturing, have advised on cutbacks that would affect at least 5,000 workers in the coming months.

The data showed that majority of these companies have asked their workers to take mandatory leaves of absence, while some have stopped operating and the rest have started to retrench workers.

Two years of global financial and economic meltdown could make over 50 million more people unemployed by the end of this year, the International Labor Organization warned.

New estimates indicate that “global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate,” the ILO said in a statement.

The biggest number of workers to be laid off were from Ninec, a Japanese manufacturing firm engaged in the production of precision electronic equipment focusing on optomechatronics which is a combination of mechanics, electronics and optics.

Ninec submitted notice of forced leave to be implemented twice this year. The first one is set on Jan. 30 involving 886 workers, and another on Feb. 2, with 900 workers.

Panasonic Corp. was the latest Japanese company to bare plans to close its local factory. Japanese electronics maker NEC Tokin the other day said it is laying off 9,450 jobs worldwide including plans to close factories in China, Thailand and the Philippines that could affect 16,000 jobs.

Panasonic would likely report an annual net loss of about 100 billion yen ($1.1 billion) on restructuring charges, weak demand for consumer electronics and the effects of the strong yen, a newspaper said.

It would be the first net loss in six years for the company, formerly known as Matsushita Electric Industrial Co Ltd.

Panasonic said it would close its Philippine facility that produces 12 million manganese dry-cell batteries a year.

Some 15,000 Filipinos have been laid off over the past two months while 19,000 others had their work week cut to four days or less, he told reporters.

Another Japanese firm Sanyo Denki which is into the manufacture of electrical machinery, electric appliances, computerware, electronic materials and all parts and accessories, and sale of scrap materials was forced to transfer 900 of its employees for indefinite leave that took effect from Jan.3 and 17 until Jan. 31, Feb. 14 and 21.

The next batch of affected workers numbering to 312 was lined up for forced leave effective Jan. 17, 24 and 31 from the same company.

For manpower services, Powerlane Resources Inc. reported 378 workers would be asked to take forced leaves effective Jan. 30 to 31.

One garment factory, the Limech Garments Mfg. Corp. engaged in the import and export of garments had asked as early as October 2008, 200 of its employees to take forced leaves.

Another firm who advised employees to take forced leaves as the Taian Subic Electric (TECO) which is into the assembly, import, and export of inverters, circuit breakers for high and low voltage and parts for electronic appliances and equipment, spare parts and accessories for home industrial and commercial use.

TECO’s notice was given to SBMA to implement forced leave as early as October with over 200 workers affected.Total workers under forced leave reached 4,281.

While notice of closures were submitted by Air 2100 Inc., a company engaged in door to door international and domestic delivery and freight services, international forwarding and business logistics services. It will lay off 33 workers when it closes operations on Feb. 7.

Harbour Yacht Trading Services Corp., a yacht repair service company, also notified SBMA it had stopped operating since last December resulting in the lay off of 36 employees.

Cacho Hermanos, a pre-press printing, binding, finishing and warehousing also stopped operating since Jan.23 with 15 layoffs.

Taiwan’s Wistron Infocomm (Phils) Corp. had advised 420 of its workers to take a leave effective February 20 this year. The firm is engaged in the making of parts and units for electronics and mechanical such as ATMs and cash dispenser, among others.Subic Power Corp. which is into power sale and generation also trimmed down its total workers by 76 employees effective February 22 and the next batch by April 30. Total retrenched workers could reach 530.

Roque said that a “worst-case scenario” would see the number of jobless rise to between 250,000 and 300,000 by the end of June.

He described the job cuts so far, which include more than 10,000 in the Calabarzon industrial belt south of Manila, as being within the “manageable level” in relation to a nationwide work force of about 37 million.

Unemployment in the Philippines currently stands at 6.8 percent.

The government is holding talks with employers’ groups to ease the fallout from the global economic downturn, which has heavily hit the country’s two top export earners electronics and garments, where most jobs have gone so far.

Job creation is tough in the Philippines, where some 27 million people live on a dollar a day or less and where one in three adults are unemployed or underemployed, according to official data.

University of the Philippines professor Benjamin Diokno, who was the budget secretary during the term of former President Joseph Estrada, said the downward trajectory in local business is alarming.

“October 2008 exports contracted by 14.9 percent to $3.97 billion from $4.7 billion in October 2007, the weakest monthly export performance since Dec 2001,’’ he said.

The professor said the exports sector in the country was “expected to worsen’’ this year as the economies of the top 10 destinations of Philippine exports were “projected to worsen.’’

“The recovery in 2010 is expected to be weak,’’ he said.

Weaker economies in the big markets would translate to lower demand for Philippine products, which meant more factory closures and layoffs, Diokno said.

House allies of President Arroyo, meanwhile, said Mrs. Arroyo’s trip to the World Economic Forum in Davos, Switzerland will result in more jobs for the Filipinos.

Rep. Antonio Cuenco (Lakas, Cebu City), chairman of the House committee on foreign affairs, said that getting for business into the country could offset the thousands of job losses as a consequences of the economic meltdown.

Rep. Jeci “Bong” Lapus (Lakas, Tarlac), vice chairman of the House committee on good government and public accountability, said Mrs. Arroyo will also discuss with world leaders the Philippine strategies on how to address the economic meltdown.

“This means our country can help by giving inputs as to how nations can weather this global economic depression,” Lapus said yesterday. Ayen Infante, Charlie V. Manalo, Pat C. Santos, Mina Diaz, Daily Tribune

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