Over the past few months, news reports have indicated Thailand has entered a new era of technological development, with more companies embracing digital technology via the use of artificial intelligence and robots. But such technological progress has made some people worried about what the future holds for them.
The new trend became clear late last month when Thailand's oldest commercial bank, Siam Commercial Bank (SCB), announced it would cut its current 27,000-strong workforce by nearly 45% and in the process also close nearly 65% of its 1,153 branches.
Hot on the heels of SCB, another big employer, Total Access Communications Plc which operates the DTAC mobile telephone network, made a move that reflected the increasing need for the company to capitalise on the digital transformation trend. It announced a plan to cut its workforce by 1,000 -- at least 20% of its nearly 5,000 staff -- over the next 11 months.
It is obvious that the two companies, like numerous others in the private sector, have had to resort to downsizing their operations, while their customer bases have remained stable -- or even expanded tremendously in the case of SCB -- with the use of digital technology to help facilitate operations and in effect cut overheads.
In fact, SCB, which is Thailand's second-largest lender by assets, has been at the forefront of digital innovation in the banking sector. It has made it abundantly clear for the past few years that it would be focusing on the use of technology. It was the first bank in the country to set up what it called an "innovation centre" that has looked for ways to adapt ahead of the disruptive technology that may make things difficult for many employees.
Sooner rather than later, others in the banking sector which is ripe for technological disruption will find it necessary to follow suit. They will have to accept that their staff levels and the conventional physical branches opened over the decades will have to be cut drastically.
Take a look at the top four banks in the country, namely SCB, Bangkok Bank, Krungthai Bank and Kasikornbank. Each has staff levels in excess of 20,000 and more than 1,000 branches. If SCB is taken as a base case, then in the next two to three years more than 43,000 bank employees are going to be made redundant at the big four banks alone.
And this is just one industry. Imagine when this trend reaches others. There will be millions of people out of work and that will have major social and economic implications.
As the move to push forward with Thailand 4.0 accelerates, the private sector and the government need to push for retraining and possibly offer incentives to companies to reskill their employees to cope with the changing environment.
Thailand's economy over the past few decades has been built on cost competitiveness which depends greatly on a lower- or semi-skilled labour force. In the wake of technological change, this work force will soon no longer have an advantage.
It's time those in the private sector and the government, in particular, the Labour Ministry which oversees labour development affairs, to prepare measures to enable the existing work force to adapt. Such measures including programmes to reskill the workforce will mitigate the negative impacts of the new age of industrialisation.
As the government is determined to push for Thailand 4.0 development, it needs to pay more attention to the side effects of the plan on those still using conventional technologies.
This critical matter needs to be dealt with before it is too late, or Thailand will eventually suffer the consequences from what is supposed to be a strategic move to enable the country to achieve its long-term development goals.