Dell Computers announced a voluntary redundancy package yesterday for 200 employees at its Limerick operations, the first in its 10-year history in the city.
It said the decision was part of its "aggressive management of operating expenses". The package will affect 4.5 per cent of Dell's 4,500 staff in Limerick and will be offered to middle management, non-production line supervisors and secretaries. The firm's 1,200 employees in Bray and Cherrywood, Dublin, will be unaffected.
Mr Pat Casey, Dell's human resources vice-president, said the decision was a measure of the changing world environment of unit price reductions and there was pressure on the cost base. "It is the first time we have had to do this in 10 years in Limerick," he said.
Financial personnel, engineers and, "largely people who would work out of offices" would be affected, Mr Casey said. Although he could not rule out future job cuts, the goal was to introduce a redundancy programme once only. The recent flat first quarter financial results, when the company announced a net income of $462 million (€526 million), were unrelated to the decision, he added. Results for EMEA [Europe, the Middle East and Africa] had been strong, with shipments growing by 24 per cent and revenue by 10.5 per cent, Mr Casey said.
Dell recently launched a price war against other PC and computer manufacturers which is eating into its own profits and it announced the first layoffs in its history in February. Up to 4,000 layoffs are being made, mostly in Texas where the firm is headquartered. But a fortnight ago, Dell was stating that its 9,000 employees in the EMEA would be unaffected by the cuts.
Increased automation over the past months had allowed the changes to be made, Mr Casey said. "The programme is designed to attract the numbers we need and we are confident we will get that."
The affected employees, who were told the news yesterday morning, will be offered "competitive severance packages", Dell stated, including more than six weeks pay per year of service, extended medical and life cover, career counselling and out-placement assistance. The programme would be open to relevant employees until mid-June, Mr Casey said.
The Minister for Enterprise, Trade and Employment, Ms Harney, said she was happy to note that Dell was continuing to recruit for its production operations despite the sector's volatility. Ms Mary Buckley, regional director, IDA Ireland, said the losses were regrettable but noted it was part of an overall strategy.
Analog Devices, the Limerick-based semiconductor manufacturer, announced yesterday that it would close part of its operations for a fortnight in August because of a downturn in the industry. Mr Alistair Purdy, human resources director, said a majority of the workforce of 1,400 would be asked to take annual leave for a week or two weeks in August.
