Narayan AmmachchiThe Philippines’ BPO industry is facing a challenge few expected: services export revenue is still rising, contact centers are expanding, but employment growth is slowing.
In fact, the country’s BPO workforce could even fall below its 2025 level, according to the Information Technology and Business Process Association of the Philippines (IBPAP).
Earlier this month, IBPAP revised the targets it had set in its 2022 roadmap. The industry body had projected that the sector would reach $59 billion in revenue and employ 2.5 million full-time workers by 2028. It now expects employment to range between 1.85 million and 2.14 million by 2028.
That means the industry’s workforce could fall below the 1.90 million people employed in 2025.
Employment growth has slowed since the arrival of generative artificial intelligence(AI) in late 2022. In 2023, industry revenue grew 9.2%, while employment rose 8.2%. The gap widened again in 2025, when revenue is expected to increase 5% compared with employment growth of just 4.4%. In 2026, revenue is forecast to grow 5.3%, while employment growth is expected to slow further to 3.6%.
“For years, our industry has measured success by how many people we could employ,” acknowledged IBPAP President and CEO Jack Madrid during a media briefing. “The next chapter will increasingly be defined by the value every Digital Filipino Worker creates. That is the shift from capacity to capability”.
One major reason revenue is growing faster than employment is that providers are relying more on automation, while clients are increasingly paying for business outcomes instead of labor hours.
“Our own experience shows the Philippines industry is growing. We’ve even opened a fourth office in the Philippines this year, this time in Cebu,” said Tim Mobley, President of Connext Global, which employs thousands of people across the Philippines.
Mobley told Nearshore Americas that AI is changing the nature of jobs rather than eliminating them.
Growth-Employment Disconnect
At first glance, the industry appears to be booming. Over the past 12 months, more than a dozen foreign BPO companies have expanded in the Philippines, with some opening offices even in remote towns far away from Metro Manila.
Global customer experience giant Concentrix announced a new site in Quezon City that is expected to create 4,000 jobs. MicroSourcing and Beepo have opened a joint Service Delivery Center in the Clark Freeport Zone in Pampanga, promising to generate 400 jobs.
Omega Healthcare is talking about doubling its Philippine workforce from 2,500 to 5,000 employees by the end of this year. India’s HCLTech and Genpact have also opened one new site each in recent months. Genpact’s newest delivery center is located in Bohol, about 630 kilometers southeast of Manila.
At the same time, the number of Global Capability Centers (GCCs) continues to grow, creating more than 20,000 jobs so far.
Why, then, has IBPAP lowered its employment forecast for 2028?
Labor unions point to job losses that receive little attention in the local media and to thousands of workers placed on what the industry calls “floating status,” or the bench.
Late last year, about 400 Wipro employees in Cebu were placed on “floating status” because of alleged poor performance. Several other BPO companies are facing similar accusations. TTEC, an Austin, Texas-based company, has allegedly placed at least 1,500 call center employees on the bench across multiple sites, including Novaliches, Cebu and Iloilo.
The issue came to light after dozens of former employees filed a complaint with the Department of Labor. They alleged that Verizon, a US telecommunications company and one of TTEC’s clients, had ended its contract, leading to the loss of their jobs.
Unlike in the United States, Philippine companies rarely announce layoffs publicly, as doing so can invite regulatory scrutiny. Instead, many workers are placed on “floating status” for up to six months—a legal arrangement that allows employers to temporarily suspend work without formally terminating employment. Labor unions are now pressing for the passage of the Magna Carta for BPO Workers, arguing that it would close what they call the 1974 “floating status” loophole, which employers often invoke when overseas clients abruptly cancel or scale back contracts.
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