Canadian software company Corel Corporation is closing its Dublin-based engineering operation with the loss of 139 jobs, it announced yesterday.
The closure represents one of the first major pull outs by a multinational software company and was described as a "big disappointment" by IDA Ireland.
Some 90 per cent of staff who worked at translating Corel's software products into European languages will be made redundant by November as part of a $4 million (€4.6 million) to $6 million cost savings plan for the company.
Corel, which is well-known for developing WordPerfect and Corel DRAW software, is in the middle of a restructuring process designed to save some $40 million following a slump in sales.
It recently revealed a second quarter operating loss of $23.3 million on sales of $36.6 million.
Each staff member in Dublin will be offered a redundancy package which includes statutory redundancy payments plus four weeks pay for every year of service.
The company has also offered a completion bonus up to 20 per cent of annual salary and a six month extension on share options.
Some staff will be offered a relocation package to move to Ottawa, Canada, where the localisation and engineering work previously carried out at the Dublin site will now be completed.
The redundancy package will cost the company $1.4 million.
Corel has set aside $18 million to cover the restructuring costs generated by closure of the engineering arm of the Dublin office.
This will include salaries, benefits, and third party expenditures.
It has also agreed to pay back some £750,000 in IDA grants which the company received when setting up in Dublin.
A small number of staff will be retained in Dublin in the services, manufacturing and distribution sectors to support Corel's international customers. The company said none of Corel's outsourcing contracts with third party firms or customers in the Republic would be affected by the relocation to Canada.
The closure in Dublin comes just two months after Corel shed 320 staff, representing some 21 per cent of its workforce and follows the sudden resignation of Corel's chief executive and founder, Mr Michael Cowpland last month.
Mr Derek Bierney, interim chief executive at Corel, said the decision to move the engineering operation to Canada was a strategic decision which would bring efficiencies.
He said staff in Dublin may not have been pleased with news of the redundancy but it was a package which treated them with respect.
"My expectations are that Corel staff will not have a major problem in finding work due to the jobs boom in Dublin," he added.
An IDA spokesman said Corel's decision was "unexpected" and a "big disappointment" for the agency.
However, he said it was a problem specific to Corel and had no implications for the rest of the software industry in the Republic.
