Multinationals from core countries are outsourcing their reservation services and data processing to periphery nations like India and the Philippines in order to reduce costs. This practice can lead to job losses in core countries.
The trend of multinational corporations establishing reservation services and data processing centers in periphery nations, known as outsourcing, has become increasingly prevalent.
This strategy involves transferring specific business processes to external service providers in different countries.
For instance, many multinational corporations have relocated call centers and back-office operations to countries like India and the Philippines due to the lower cost of labor compared to core countries. These periphery nations offer more cost-effective labor, contributing to the corporations' bottom line.
Outsourcing allows these corporations to leverage cheaper labor markets while concentrating on their core competencies, potentially boosting their profitability.
However, this practice often leads to job displacements in core countries as companies shift their operations and employment opportunities to periphery nations.
While outsourcing offers cost efficiencies for corporations, the repercussions can include unemployment and job insecurity in core nations.
This shift in business operations raises debates about the ethical implications of prioritizing cost savings over local employment opportunities, impacting both the economies of core and periphery nations.
The consequences of this practice extend beyond corporate profit margins, influencing global employment patterns and socioeconomic dynamics.