News yesterday that Gateway is reviewing its European operations only serves to underline the Taoiseach's warnings about the outlook for the Irish economy. In numeric terms, jobs lost to date as a result of the downturn in the technology have been small. But the impact on flagship employers such as Intel - which announced plans on Thursday to seek up to 170 voluntary redundancies to cut costs at its Leixlip plant - has been sufficient to dent the confidence which has become an intrinsic part of the economic boom.
Despite the gloomy nature of so many of the announcements from the high-tech sector in recent months, however, most forecasts for the Irish economy remain benign. Nevertheless, growth this year - while still reasonably strong - could be a good deal slower than in 2000 and additional caution in framing the upcoming Budget is called for.
Firms like Intel and, indeed, Gateway and Dell, have been hit by a massive downturn in PC sales. Many are hoping that the next generation of the Windows operating system, Windows XP, will rescue them as firms are forced to invest in the new machines to handle more power hungry applications. However, others are less sure that hard hit businesses can be persuaded to upgrade their technology yet again.
Ireland may have so far escaped the worst ravages of the downturn in the US. But the fact that Gateway, which employs 900 people, has announced it is reviewing Dublin as the location for its European headquarters may mean the worst has yet to come.
So far this year some 2,500 people have lost their jobs in the technology sector and more are expected. That's out of a total workforce of 55,000. The IDA is cautious about predicting job loss numbers but it is still pencilling in around 8,000 this year across all sectors with about 12,500 new jobs compensating. But few, if any, of the latter are expected in the high tech sector.
The impact of this downturn on confidence is already evident, particularly in the slowdown in the commercial property sector and some price falls in residential property. A cautious approach from the Taoiseach, even if this is at odds with his Minister of Finance, is timely.