Nortel Networks, the Canadian telecommunications equipment provider, is cutting 120 full-time and temporary jobs at its facilities in Galway and Shannon.
The transfer of the Galway facility's circuit pack manufacturing activities to a Nortel facility in Cwmcarn, Wales, will result in the loss of 65 jobs, while the out sourcing of the facility's logistics and distribution function will see the loss of a further 50 jobs.
The movement of high-end systems assembly and testing from Shannon to Galway will see the net loss of four jobs. Nortel employs close to 900 people in the Republic. The move of the manufacturing operation to Wales was thought likely to happen though it is occurring more quickly than had been expected. The decision to outsource the logistical and distribution function came as a surprise to the workers.
The job losses are part of a worldwide restructuring process, involving increased outsourcing and concentration on core activities.
SIPTU expressed concern last night that Nortel had given no guarantees against further losses at the Galway plant, and said it was seeking an urgent meeting with the firm's senior vice-president of operations for Europe, the Middle East and Africa, Mr Liam Nagle.
The SIPTU representative, Mr Colm Keaveney, said the workers were "quite shocked" and concerned, and an immediate meeting with management had been demanded. Serious questions had to be answered by the company in relation to the timing of yesterday's announcement on job losses, and the specific areas affected, he said.
Mr Keaveney said it was quite clear that there had been no consultation with the workforce by local management. He understood that the redundancies would be voluntary, but he did not believe that the company would be able to give a commitment that there would not be further lay-offs.
Nortel's Galway plant was originally established as a manufacturing and assembly plant in 1973 and as recently as five years ago was still predominately involved in manufacturing.
However, in recent years it has doubled its workforce while at the same time concentrating on R & D, customised solutions and customer support activities.
The redundancies were announced at a meeting of the workforce in Galway yesterday afternoon. Some of those losing their jobs have worked for Nortel for up to 20 years. They are being offered a voluntary redundancy deal involving six weeks redundancy pay per year of service. At income levels of between £16,000 to £18,000 per annum, the redundancy payments will equal approximately £2,000 for each year of service, or £40,000 for a worker with 20 years service, plus statutory payments.
The take-up of the redundancy offer will determine the breakdown between full-time and temporary workers being laid off. The company to which the logistics and distribution function is being out-sourced has not yet been decided on, though it is thought more likely to be from the Shannon than the Galway region.
Meanwhile, Mr Nagle acknowledged some of the workers to be affected had been with the company for up to 20 years and had "done an outstanding job for us. What is happening is very regrettable but is important for positioning for the future".
He said the company was offering a generous redundancy package and was doing its utmost to place workers affected with companies in the area which were seeking employees. "This is necessary to secure the long-term future" of the company's Irish operation, he said.
In February, Nortel worldwide announced it would be reducing its 80,000 strong workforce by 8,000 through lay-offs, shifts, retraining and attrition. The programme of lay-offs was to take place over a period of 18 to 36 months. Nortel in Galway has a wages bill of £30 million per annum and provides an estimated £25 million per annum in business to local suppliers.
