The diversification of the Irish tech sector should help to cushion the impact of a spate of lay-offs amid a global slowdown in the industry, Minister for Finance Paschal Donohoe has said, as expectations grow of a winter recession in Europe.
Mr Donohoe spoke after chairing a meeting of the Eurogroup club of finance ministers which grappled with a darkening economic outlook, and responded to fears that Facebook parent company Meta may be the next to announce job cuts following sweeping redundancies by fellow tech companies Stripe and Twitter.
“Of course, the loss of any jobs within a sector is concerning for the Government and for our economy, but I see a lot of strength within our jobs market still,” Mr Donohoe told The Irish Times.
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“Within the technology sector, while of course we have huge employers like Meta, like Twitter, companies that have been affected, there has been the significant development of the small- and medium-sized technology companies within our economy as well,” he continued.
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“Even within the technology sector, many employers are at the moment looking for talent, looking for workers to grow their businesses. I appreciate it’s a tough time for many who have been affected by these redundancies, but I’m still positive about the ability of our economy to protect the jobs that we have and grow them in the time ahead.”
A spate of negative economic indicators in recent weeks have raised expectations that the euro area may be heading for a winter recession, as high inflation driven by soaring energy costs weighs on consumers and companies.
The European Commission’s economy chief Paolo Gentiloni told journalists that “many things point to a contraction in economic activity this winter, in the coming months”, though he expressed hope that the outlook could brighten next year.
The commission is due to release its latest economic forecast later this week.
“It’s going to indicate further weakening of the economy, and confirming high inflation,” trade commissioner Valdis Dombrovskis said of the forecast. But he expressed hope that inflation would slow from its record rate of 10.7 per cent year on year in October, because “energy prices have peaked”.
Anger at the recent Inflation Reduction Act passed by the United States overshadowed the Eurogroup meeting, as several finance ministers expressed concern that US-based companies would unfairly out-compete their European rivals due to the subsidies it provides to the green energy and auto industry.
“What is at stake now is the possibility for Europe to remain in the technological and industrial race for the 21st century,” said French finance minister Bruno Le Maire.
Combined with cheaper energy costs in the US, “all the subsidies that might be provided by the US government to private companies” may be “very detrimental for the European industry”, he warned.
Germany’s finance minister Christian Lindner said he was “concerned” about the consequences of the Bill and that the “US administration needs to be aware of its consequences”.
“We should do everything we can to avoid a tit for tat scenario, or even a trade war,” Mr Lindner said.
