THE DECISION:MANAGEMENT AT Dell confirmed to employees yesterday that 1,900 jobs will go at its Limerick plant over the next 12 months after the firm decided to move its computer manufacturing operations to Poland.
The company said the move was part of a $3 billion (€2.18 billion) initiative to cut costs following a review of its operations.
At a series of briefings yesterday morning, Dell's 3,000 workers in Limerick were told that the first wave of redundancies will begin in April with the remainder going at various stages over the next year.
When Dell ceases manufacturing in Limerick, it will continue to employ 1,100 staff in Limerick who work in the areas of logistics and product development, and 1,300 at a sales and support operation in Cherrywood, Co Dublin.
Workers who attended the briefings said there was widespread anger at the terms of the redundancy deal which, they said, was unfair to workers who have given long service to the company.
Those who lose their jobs will receive six weeks' pay for every year worked, capped at 52 weeks. Bonus pay and overtime will not be factored into the payments.
Seán Corkery, vice-president of Dell's operations for Europe, the Middle East and Africa, said the decision to cut jobs was inevitable, given the cheaper cost of production in Poland as well as a shift in demand away from desktop computers which are manufactured in Limerick.
"It was a very, very difficult decision given our history here, and we needed a very strong business case to make this decision. And we have.
"That's why it took us such a long time to make this decision," Mr Corkery said.
He insisted that a final decision on shutting down manufacturing in Limerick was only taken earlier this week, despite mounting speculation over recent months that job losses were imminent.
Mr Corkery also denied that Dell had planned to close manufacturing in Limerick when it built the plant in Lodz.
"At the time, we needed extra capacity and wanted to be close to our customers in central and eastern Europe," he said.
Mr Corkery said the increase in sales of portable notebook computers and the decline in desktop sales changed the economic model for Limerick.
"Notebooks are a very different economic model," said Mr Corkery. "The components are sourced in Asia and it's a very different logistics and cost model because they are smaller devices. This site is less competitive in notebooks." He said the production of notebooks was much more labour-intensive and that labour costs in Poland were about 40 per cent less than in Ireland. "Notebooks are small and more transportable than desktops so there is more flexibility in where they are built," said Mr Corkery. He confirmed that the closure is part of a move by Dell to save $3 billion.
Mr Corkery defended the terms of the redundancy packages.
"Today there is a lot of venting of anger and frustration, and I can understand that. But this is similar to any other package we've done.
"Some were disappointed there wasn't more, but we've been extremely consistent on what we've done in the past."
Mr Corkery said there was "no guarantee" about the security of existing jobs in Limerick and Dublin, but he said that in the context of what they do - for example supporting customers and managing outsourced functions - they have become even more important. He also said there was scope for expansion in Limerick.
"Our hope is to continue to add value to the centre here . . . It will be complex to manage our out-sourced companies and I think there are opportunities to do that here. This is not a growth-to-zero strategy," he said.