Up to 60,000 jobs could be lost in the Philippines’ key electronics sector after Intel Corp shut a facility and Texas Instruments (TI) announced a number of layoffs, an official said yesterday.
Intel, the world’s biggest computer chip maker, announced plans on Wednesday to close plants in Malaysia, the Philippines and the US, with the loss of 1,800 jobs in its assembly test facility in Cavite province south of Manila.
TI, another big US player in the sector, told the government last month it was laying off 400 workers from its semiconductor factory in the northern city of Baguio because of the global financial crisis.
The cuts highlight the poor state of the electronics industry and could be the beginning of a wave of job losses in the sector.
“The impact of the economic downturn on our business was more severe than we anticipated and the outlook is uncertain,” Intel Philippines said in a statement explaining the closure of its facility.
The laid-off employees “will be offered a severance package” and various “transition services” the company statement said without giving details.
Intel was once one of the biggest exporters in the Philippines and one of the first to set up semiconductor manufacturing facilities there 35 years ago, investing about US$1 billion over that time, its Web site said.
“The semiconductor industry is already getting hit,” Philippine Labor Secretary Marianito Roque told ABS-CBN television in an interview.
“We have seen this as early as three months ago,” he said.
“We expected that we’ll be getting hit in the first semester of this year,” he said.
Roque said the government was giving counseling and retraining to “about 60,000 workers that could be affected nationwide.”
The labor department is “getting daily notices now not only of retrenchments but on the reduction of work shifts, reduction of working hours and compression of the work week,” he said.
Plants employing 19,000 people have so far reduced shifts or working hours, he said, but did not specify how many had been laid off.
“We have to admit that this is not business as usual in the Philippines for the electronics sector and in the garments sector as well,” Roque said.
“These will be the two particular areas that would be affected by the global financial crisis,” he said.
The electronics sector accounts for about 70 percent of the Philippines’ exports and employs 480,000 workers.
Roque said Manila expected the business process outsourcing sector to take up some of the slack, with a “nominal growth” in the call center industry creating about 130,000 jobs this year.
The Philippines also hopes to send its workers to “hotel jobs in Bulgaria and even manufacturing jobs also in some countries like Australia.”