US companies Dell Computers and 3Com, both with major investments in Ireland, announced sweeping job cuts yesterday due to the slowing US economy, but as with other multinationals which have laid off workers recently the Irish operations are expected to escape lightly.
Dell Computers, the world's number one computer maker, which employs 4,500 people in Limerick and 1,200 in Bray, Co Wicklow, said it would cut 3,000 to 4,000 jobs over the next two quarters, in addition to 1,700 job cuts announced in February. However, the Texas-based company said the job losses would primarily affect positions in central Texas.
3Com, the struggling California networking equipment-maker which employs more than 1,000 people in Blanchardstown, announced that it will cut 3,000 jobs, or 30 per cent of its workforce, in an attempt to return to profitability. But a source close to the company said no major cuts are anticipated in Ireland.
Ireland is proving resistant to the technology downturn as its multinational operations have evolved from assembly to high-end work. Research and development are the last areas to be scaled back in a downturn. Also most US companies in Ireland are aimed at the European market where the slowdown is less marked.
Only 700 information technology jobs have been lost in the Republic since January, according to IDA Ireland. This contrasts with a record monthly loss of 165,564 jobs in US corporations in April, four times that of a year ago, according to international outplacement firm Challenger, Gray & Christmas.
Dell blamed slowing industry growth for downsizing its workforce and said it was streamlining the company after years of rapid expansion. The company has slashed computer prices to take market share from its rivals. The computer maker said its sales for the first quarter, which ended Friday, met previous guidance of $8 billion (€8.95 billion) in revenue and 17 cents in per-share earnings.
The latest workforce cuts at 3Com are in addition to 1,200 job losses among full-time and contract workers announced in March. Last week 15 designers were laid off at the Blanchardstown plant as part of the cut-backs.
Total job losses at 3Com amount to 4,200 this year, or more than 40 per cent of the work force, as the beleaguered company seeks to save $1 billion annually and become profitable by the next fiscal year, which begins on June 4th 2002.
"Ireland will be relatively unscathed, though the process is not complete," a company source told The Irish Times. "It will be a question of minor adjustments rather than major cuts." However, 3Com spokesman Mr Brian Johnson said in Santa Clara that there were no guarantees these would be the last payoffs. "We can't confirm or deny it will be the last one," he said. "Clearly it is our hope that this will get most of the work done."
The company's chief executive recently expressed a continuing commitment to the Blanchardstown operation which is engaged in design, research, development and distribution of 3Com products.
Lucent Technologies, also plagued by financial losses, said yesterday its chief financial officer, Ms Deborah Hopkins, has stepped down nearly a year after she was hired. Lucent, with 1,000 jobs in Dublin, has announced 10,000 job cuts since the beginning of the year.
