BPO’S US$220-M SLIDE

Key points: Local spending fell 22 per cent from about US$1 billion to US$780 million as another 5,000 jobs disappeared. Government data put employment at 50,000, while the GSAJ estimates about 40,000. A working group is pursuing new investment, better skills and a shift towards higher-value KPO services. JAMAICA’S global digital services (GDS) sector spent an estimated US$780 million in the local economy in the fiscal year ended March 2026, down US$220 million from about US$1 billion a year earlier as the industry lost another 5,000 jobs. The estimate — which measures spending in Jamaica rather than export earnings — was higher than the US$612 million earned from bauxite and alumina exports in 2025 and was equivalent to about 47 per cent of the country’s US$1.65 billion in total merchandise exports. The spending covered wages, office-space leases, utilities and other operating expenses. Employment in the sector fell to approximately 50,000 in March 2026 from 62,000 two years earlier, while the number of companies declined from more than 90 to about 70. The sector had already missed Government’s March 2025 target of 70,400 jobs by 15,400. By March 2026, the gap had widened to 20,400 jobs. “This decrease in employment is attributed to a variety of factors which include: Onshoring/reshoring, geopolitical considerations, technological advancements, the impact of Hurricane Melissa and the local challenges of cost of doing business,” the Government of Jamaica stated in its annual report on Form 18-K for the fiscal year ended March 31, 2026, filed with the United States Securities and Exchange Commission. Jamaica’s global services sector has shed more than 12,000 jobs in the last two years. . The report said Hurricane Melissa compounded those pressures. “Hurricane Melissa, in particular, had a disruptive impact on Jamaica’s GDS sector, primarily through damage to critical infrastructure and interruptions to essential utilities. Widespread outages in electricity and telecommunications networks constrained business continuity across BPO (business process outsourcing) and other digitally enabled services, limiting firms’ ability to meet international client demands and maintain service-level agreements. In addition, damage to transportation networks and displacement of workers further affected operational capacity and productivity,” the annual report added. However, Global Services Association of Jamaica President-elect Yoni Epstein has placed employment in the sector at about 40,000 for two consecutive years. The Jamaica Observer reported on August 1, 2025, that Epstein said the sector employed about 40,000 people, a figure he repeated to the Financial Gleaner earlier this month. The Government, by comparison, reported approximately 55,000 jobs in March 2025 and 50,000 in March 2026, leaving differences of 15,000 and 10,000, respectively. It was not immediately clear whether the discrepancies reflected different reporting periods, industry coverage or methods of counting workers. Epstein is the founder and CEO of Outsourcing Management Limited, trading as itel. Since 2012, the Development Bank of Jamaica Limited (DBJ) has committed US$92.66 million in financing to the GDS sector and disbursed US$90.01 million to 20 BPO ventures covering approximately 1.18 million square feet of operating space. The ventures had a combined capacity for 27,513 jobs. The report said DBJ financing also facilitated US$152.72 million in private-sector investment. However, the Government’s latest report gives a different account of the occupancy of the DBJ-funded projects. The 2025 annual report said all 20 projects had been completed, leased and occupied and had reported total employment of 22,598. However, the 2026 report said only 19 projects were leased and occupied and had provided 22,598 jobs at their peak. It said the remaining project had been completed with capacity for another 1,200 jobs, but the developer was still seeking an operator. The reports do not explain the change in the stated occupancy of the projects. An unused headset at a vacant workstation symbolises the contraction in Jamaica’s BPO sector, which shed 5,000 jobs as annual local spending fell by US$220 million. (AI-generated photo illustration). The sector’s contraction has also affected the Port Authority of Jamaica (PAJ), which recently postponed plans to monetise its BPO real estate assets through an initial public offering on the Jamaica Stock Exchange. A CariCRIS report on the PAJ noted, “The authority decided that prevailing market conditions were not conducive to achieving favourable valuation outcomes and therefore postponed the transaction.” The Government has responded by establishing a working group comprising representatives of the GDS sector, the PAJ, Jamaica Promotions Corporation (Jampro) and the Jamaica Special Economic Zone Authority (JSEZA) to develop and implement an action plan aimed at growing the industry. The working group’s mandate was limited to three areas in the Government’s 2025 annual report. The latest report expands the mandate to six areas. One of the six areas is changing the industry’s mix of BPO and KPO (knowledge process outsourcing) jobs from 80:20 to 60:40. This would reduce the sector’s concentration in basic queries and routine tasks while expanding its participation in more advanced, higher-value activities. Other focus areas include enhancing job-readiness and digital-skills curricula, optimising processes, institutions, regulations and the incentives framework, strengthening the sector’s value proposition, and developing incubator and accelerator programmes for small and medium-sized enterprises. These initiatives build on work being done with the HEART/NSTA Trust, the United Kingdom Trade Partnerships Programme and the Inter-American Development Bank to better prepare GDS firms and their staff to take on new global opportunities. “Jamaica, through Jampro (the government agency responsible for the promotion of business opportunities in export and investment), has actively engaged international KPO operators to get them to expand their business to Jamaica. Additionally, Jampro continues to work with local universities and key stakeholders, sharing opportunities for employment as well as establishing partnerships for training in the KPO and ITO (information technology outsourcing) space,” the annual report stated.