Workforce Downsizing and Labour Productivity Growth in Asia Pacific Telecommunications Operators and Implications for SDG 8
This paper analyzes eleven Asia-Pacific telecommunications operators from 2014 to 2024 and finds that while frequent, transformation-driven workforce downsizing yields significant short-term gains in labor productivity, these benefits do not persist into the following year, highlighting a critical tension between digital-sector efficiency and the long-term employment goals of Sustainable Development Goal 8.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the modern economy, a persistent question haunts the relationship between technology and work: as machines and software become smarter, do they create more jobs or fewer? This tension sits at the heart of a global promise known as Sustainable Development Goal 8. This goal asks nations to grow their economies while ensuring that everyone has access to decent, productive work. It assumes that economic growth and good jobs can move forward together, but history shows they often pull in opposite directions. When companies adopt new digital tools, they often become more efficient, producing more value with fewer people. While this boosts the numbers on a balance sheet, it can leave workers behind. The telecommunications industry offers a perfect place to watch this drama unfold. These companies build the digital networks that power the rest of the economy, yet they are also the first to replace human workers with automation and artificial intelligence as their technology upgrades from one generation to the next.
A team of researchers from Telkom University in Indonesia decided to look closely at this dynamic over a ten-year period, from 2014 to 2024. They gathered detailed records from eleven major telecommunications operators across the Asia-Pacific region, including giants from India, Japan, Australia, and South Korea. Instead of relying on broad government statistics, the team hand-collected specific data on how many people each company employed every year, cross-referencing these numbers with the companies' financial reports and official national economic indicators. Their goal was to see if these digital giants were actually creating a future where technology and employment grow together, or if they were simply cutting staff to boost short-term numbers.
The researchers found that the story of these companies is one of constant change, but not the kind driven by economic booms or busts. In nearly half of the years they studied, these companies reduced their workforce. Surprisingly, these cuts did not happen when the economy was struggling. In fact, the most intense period of job cuts occurred in 2021, a year when the broader economy was recovering strongly from the pandemic. Instead of reacting to the market, the companies were reacting to their own technology schedules. They were shedding staff to retire old network equipment and make room for new 5G systems and cloud services. The timing of these layoffs was dictated by the arrival of new technology, not by a lack of customers or money.
When these companies did cut jobs, there was an immediate, visible spike in their productivity. Because they had fewer employees but were still generating roughly the same amount of revenue, the amount of money earned per worker jumped significantly. In the year a company reduced its staff, its productivity growth was about five percentage points higher than in years when it did not cut jobs. It looked, on paper, like a clear success: fewer people, more output per person. However, the researchers discovered that this gain was a one-time event, not a lasting improvement. When they looked at the year following a job cut, that extra productivity boost vanished. In some cases, productivity growth actually slowed down or turned negative the next year. The initial efficiency boost did not translate into a sustained period of faster growth.
The study also revealed a stark reality for the region's workforce. Despite a decade of massive investment in digital infrastructure, the total number of jobs across these ten major operators (excluding the massive Chinese carrier) remained essentially flat. Some companies grew their staff through acquisitions, while others shrank, but the net result was no new jobs created. The companies that cut staff the most did not end up with the highest long-term productivity gains. Instead, the companies that managed to grow their workforce while simultaneously retraining employees for new digital roles showed that it is possible to modernize without destroying jobs.
The findings suggest that the path to a sustainable digital future requires a shift in strategy. Simply cutting staff to boost efficiency is a short-term fix that fails to deliver the long-term productivity growth promised by global development goals. The data indicates that the real value of digital transformation lies not in reducing the workforce, but in transforming it. For the promise of decent work to be kept, the industry must focus on reskilling employees to handle new technologies rather than replacing them. The research concludes that while these digital networks are essential for the broader economy to thrive, the companies that build them must find a way to grow their own productivity without relying on the repeated shedding of human labor.
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