Are You Afraid of the Dark?

With the depreciating dollar, continued red charts in the market, and unstoppable migration of investments to other countries, US recession is not in the limbo anymore. I may be wrong in the strictest sense of the term, but the once great economic power that is America is in real trouble (you don’t need an economist to tell you that, right?). If that problem does not make you feel uncomfortable, or at the very least, concerned, try to read more below.

Any BPO company’s US$1M contract from the US, which was previously at PhP55M, is now worth PhP40M. In less than 1 year, they have lost more than 25% of their potential earnings–PhP15M per US$1M–and that is simply due to the exchange rate alone. (And I don’t think anyone would buy the government’s claim that the appreciation of peso translates to improving economy, do you?) These companies will not decrease your salary–DOLE is on your side. Good news? No, believe me, you are in bigger trouble. What if they set some unrealistic goals and you failed to meet them (which is actually the idea of setting unrealistic goals, by the way)? If after systematic discussions and you still failed to meet the goals, no one will stand by you if you get terminated. Some people will take advantage of the system for their own interest. Probably rational on an individual level, but undoubtedly not on a system-wide level.

Once US companies present negative earnings (which actually started last quarter) due to the general economic turmoil, their shareholders will definitely ask for implementation of cost-cutting measures. How do they do that in terms and concepts relevant to the outsourcing industry? (more…)