Philippines telecoms operator PLDT expects to save more than PHP7 billion ($140 million) over the next five years by outsourcing most of its back-office IT operations to IBM.

Manuel Pangilinan, PLDT chairman and CEO, said talks with IBM are progressing reasonably well, and it aims to sign an agreement by the end of June, BusinessWorld reported.

The operator announced plans in March to outsource much of its back-office operations, covering billing, service delivery platforms and CRM. It said the move would lead to job reductions in the IT department, but didn’t disclose the size of the cuts.

Pangilinan said not all of its IT people will move to IBM as it needs to retain “the so-called brains of the IT organisation,” BusinessWorld reported.

He told reporters at its annual shareholders’ meeting the company had frozen salaries for the past year or two.

PLDT employs 18,000 – its mobile unit Smart 7,300.

During Q1 2017 the operator posted another quarterly drop in profit as mobile revenue continued to decline, but brisk growth in its home and enterprise units created optimism for a return to growth later this year.

In November 2016 it announced a management reshuffle in an effort to turn around a prolonged slump which resulted in its market share and profitability dropping sharply.

Pangilinan outlined a three-year recovery plan in March 2016, which included its “digital pivot” programme to reduce reliance on its legacy businesses, such as voice and texting.