Jamie Smyth

INVESTMENT: A planned multimillion dollar investment that would have created more than 500 high-tech jobs in Dublin has been scrapped by Novell, a US software developer.

The company has pulled out of plans to develop a 110,000 square feet office for a new technical support centre on a flagship docklands site at Sir Rogerson's Quay.

Novell was expected to pay €38 million to develop the site with the Dublin Docklands Development Authority. The authority would not comment on whether the firm had paid any cash to exit the deal.

The downturn in technology spending, which recently forced Novell to lay off a fifth of its staff, has resulted in the firm failing to meet a target of employing 280 employees here by 2002. Novell employs 120 full-time staff and 10 contractors at two locations in Dublin and made about 20 staff redundant last November as part of its global restructuring plan.

Mr Ian Dunlop, vice-president of product development at Novell, confirmed yesterday the software firm would not go ahead with the Irish investment because the "market had changed".

"There had been delays on the site itself and market conditions changed so that we were looking at capital costs," he said. "It was going to mean investing tens of millions of dollars in a building."

He said the company had tried to re-engineer the deal so the firm could have acted as prime developer and leased out office space to other firms, but this did not work.

But he said Novell was not planning any further job cuts at its Irish operations and was still looking for a new building that would enable it to combine its two existing Dublin offices.

Novell's operations and logistics base in Dublin supports its European sales operations in the areas of order processing, invoicing and multicurrency transaction handling. Almost a third of its global sales are in the Europe, Middle East and African region.

The decision by Novell to scrap its planned investment in the Republic is not surprising given the current weakness in the global technology sector. It reflects that Novell's business in Europe did not grow at the pace expected during the boom of the late 1990s.

IDA Ireland told The Irish Times this week the pipeline for new investments in the technology sector was not expected to recover until the end of 2002.

A $200 million (€230 million) investment by telecoms firm Ericsson proposed in October 2000 for the Cork region also remains moribund. The IDA said last year negotiations for a research and development centre focused on e-commerce had not yet been concluded.

Meanwhile, Novell, which develops computer networking software and is a competitor to Microsoft, said last week it continued to anticipate downward pressure on revenue. This would occur while the firm implemented its transition to a solution-focused business model, said the firm.

Novell's results for the first fiscal quarter of 2002 showed revenue from the United States was $144 million. The Europe, Middle East and Africa region contributed $95 million in revenue.