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Nokia confirms closing down its Research and Development unit in the Philippines by 2020
Nokia Technology Center Philippines will only operate until Q3 of 2020
The start of the decade didn’t come off great to Nokia’s research and development (R&D) unit and its employees in the Philippines.
In a report by Inquirer.net, Nokia confirmed that it will close its Nokia Technology Center Philippines in Quezon City in the third quarter of the year, with operations lasting until September 2020.
The said facility employs around 700 engineers, IT professionals, and administrative staff. The news came as a surprise to the workers. According to an employee, even the managers did not have any idea of the closure. They have been informed only an hour before the announcement.
Nokia said that the decision of closing its Manila hub is because of the tough market conditions and the increasing expenses. It added that there is an evident need for the company to consolidate its research and development offices to fewer locations to sustain the business.
Nokia Technology Center Philippines is located at UP Technohub. It was established in 2010 as part of Nokia’s premium R&D division and was the first one in Southeast Asia. Its main workforces are engineers and IT professionals who are involved in the software design of 4G and even the future 5G network.
The Finnish company is one of the major suppliers of network equipment, an important aspect of all telecommunications companies. Their business, however, has been facing tough competition against the Chinese tech giant, Huawei. In the Philippines, both PLDT and Globe have chosen Huawei as their partner for upcoming 5G network projects.
The news reflects a similar situation in their home country. Hundreds of people were laid off as a plan to minimize operating costs. Meanwhile, Nokia said that their other business operations remain the same and are not affected by the closure.
Nokia gained popularity in the Philippines because of its hit cellular phones in the 1990s and early 2000s. It was the number one manufacturer of phones before smartphones took over the market. However, Nokia’s sudden and rapid decline was attributed to its failure to adapt to the changes in technology, specifically when smartphones disrupted the industry.
Honda Cars PH to cease local manufacturing operations effective March 2020
The Santa Rosa facility was established in 1990 and began production in 1992
Honda Cars Philippines (HCPI) announced today, February 22, that it is shutting down automobile production at its Santa Rosa facility in Laguna effective March 2020. The manufacturing plant currently produces the City subcompact sedan and the BR-V mini-SUV.
“To meet Honda’s customer needs in the Philippines for reasonably priced and good quality products, Honda considered efficient allocation and distribution of resources,” reads the company’s official statement. “As such, after consideration of optimization efforts in the production operations in Asia and Oceania region, Honda decided to close the manufacturing operations of HCPI.
“HCPI will continue its automobile sales and after-sales service operation in the Philippines, through the utilization of Honda’s Asia and Oceania regional network.”
The Santa Rosa manufacturing plant, which constitutes a capital investment of P1.9 billion, was established in November 1990, and began production operations in 1992. It currently employs 650 associates.
“Honda will continue providing highly attractive products to its customers in the Philippines and continue contributing to the local society, which has been an ongoing effort for the last 50 years since Honda was established in the Philippines,” the company assures.
Wells Fargo downsizing PH operations
One of the biggest banks in the world is laying off 700 tech jobs that are currently outsourced in the Philippines, leaving stakeholders in a struggle to make sense of the wider implications of this massive job loss.
US-based bank Wells Fargo & Co. is downsizing its operations in the Philippines, leaving only 50 tech workers out of 750 by the end of the year, according to a report from Bloomberg on Friday.
Some of these jobs would be transferred to India instead, the Philippines’ main competitor in the information technology and business process management industry. Wells Fargo currently has about 12,000 workers in India.
This is part of a “global workspace strategy,” Bloomberg quoted the company spokesperson saying. Wells Fargo has not yet responded to the Inquirer’s request for further information as of press time.
At this point, it is unclear if the decision was in part influenced by the Duterte administration’s plan to rationalize tax incentives, a move which critics claimed would increase the cost of doing business in the Philippines and make other countries more attractive in comparison.
What is clear, however, is that the move will come at the expense of hundreds of families that depend on IT-BPM workers as their breadwinners. The IT-BPM industry in the Philippines is the largest employer in the private sector, allowing Filipinos to earn big without going abroad.
“This strategy will ultimately provide meaningful benefits to out employees and customers, but we recognize this change will have a significant impact on some employees and their families,” the company statement to Bloomberg said.
Wells Fargo has been undergoing a major corporate restructure since the financial services company appointed a new chief executive officer late last year. Here in the Philippines, the benefits of these changes might get lost in translation as both the private sector and the government saw the news differently.
Charito Plaza, director general of the Philippine Economic Zone Authority, thinks part of the reason must be the Citira, or the Corporate Income Tax and Incentive Rationalization Act—a bill which has made the Philippines a difficult market pitch for potential and even existing investors.
Through the Citira, the Duterte administration is planning to rationalize the tax breaks and lower the corporate income tax in the country, which is currently the highest in Southeast Asia.
Talks about the bill alone have sent pledges on a downward spiral. Last year, total investment pledges registered under Peza fell 16 percent to P117.5 billion, although this was slower than the 41-percent plunge in 2018.
Nissan Philippines Sta. Rosa plant is at risk of shutting down
Nissan saw a 28% loss in its annual operating profit and its on course to be its weakest earnings in 11 years. This is partly due to Chairman Carlos Ghosn being ousted from the company.Due to this, Nissan encountered troubles in the North American market. CEO Hiroto Saikawa tried to overhaul company with good corporate governance to put Nissan back on a more equal footing with its partner Renault.
Ghosn had an aggressive strategy of expanding the company globally. This meant offering large discounts to buyers and expanding sales of its vehicles to rental companies. This unfortunately did not do Nissan any favors and hurt the company in the long run."Today we have hit rock bottom," Saikawa told a news conference at the company's headquarters in Yokohama. He further added that he wanted the company to recover to its original performance level in the next two to three years. Mr. Saikawa said that the company is expected to make up for lost ground over the rest of the year.
Global sales dropped by 6 percent, with particularly large losses in North America and Europe. These regions are where Nissan is having problems persuading customers to splurge on new cars. These poor sales have been attributed to the company’s lack of compelling new products and inability to tap into American consumers’ growing preference toward trucks and SUV, such as the Titan, Navara/Frontier, Pathfinder, and Armada.In order to make up for lost ground, Nissan wants to reduce its production costs globally and its starting by closing down select production plants in the ASEAN region. This is in relation to a global sales slump as well as an aging line-up. On top of this Nissan also wants to introduce 20 new vehicles.
Indonesia, Philippines, and Taiwan are first on the chopping block as Nissan announced that it will cut jobs amounting to 12,500 worldwide. This accounts to 9 percent of their total global workforce. This will result in a boost in global factory utilization rate to 86 percent from 69 percent; and in return this will boost its operating profit. In short, Nissan is closing down select production plants in order to focus production elsewhere and recoup operating costs.With Nissan Sta. Rosa plant on the verge of closing down, price increases for Nissan vehicles are imminent since Nissan Philippines will have to source vehicles from elsewhere.