IBEC warns of further job losses in technology sector

 

More job losses are likely in high-tech firms and the sector will not recover before next year, the employers' group IBEC has warned.

After 234 people lost their jobs in Drogheda and Dublin yesterday, another firm supplying the computer industry last night sought to cut 100 jobs from its workforce of 260 at Clondalkin, Dublin.

Trend Technologies Europe, which makes casings for circuit boards, said the losses were due to competition from other manufacturers who had transferred business to lower wage economies such as Mexico.

The director of IBEC's technology division said it was now clear that the downturn in the US would last into next year. Mr Brendan Butler said: "Being realistic, it would be foolish to suggest that there are not going to be further job losses."

The Tanaiste, Ms Harney, said yesterday that the spate of job cuts this month suggested a "slowdown" but not a "melt down". She is understood, however, to be conscious of IDA Ireland warnings that more firms may cut jobs.

The latest cuts brought the number of jobs lost since the start of the month to some 2,000.

In Drogheda yesterday, the US telecommunications group Tellabs informed 204 staff that its plant would close before the end of the year. The cuts are a further blow to the Co Louth economy, where 400 Xerox workers, based in Dundalk, were made redundant in June.

The Internet security firm Baltimore Technologies also confirmed plans yesterday to reduce its staff by 680, although fewer than 30 workers at its Dublin base will lose their jobs.

These losses follow decisions this month by the US groups Gateway and General Semiconductor to close Irish plants which between them employ 1,570 people in Dublin and Co Cork.

Mr Butler said: "We've got to be careful that we don't talk ourselves into a crisis. Other countries are watching the developments in the information technology sector here with great interest."

It would be wrong to state that the sector was in freefall, he said. However, a reversal of the trend in the Republic would depend on the emergence of "positive signs of recovery" in the US and stable growth in Europe.

Mr Butler said the cut in US interest rates on Tuesday, the seventh this year, suggested that recovery there was not imminent.

Earlier this year, the downturn in the US had been expected to last six to nine months. However, the latest indications suggested that it might continue for up to 18 months.

Ms Harney said the recent job losses did not suggest the competitiveness of the Irish economy had eroded. Opposition politicians were swift to express concern at the latest job losses.

Fine Gael's spokesman on enterprise, trade and employment, Mr Charles Flanagan, said the technology sector was facing a "serious crisis". Labour's spokesman, Mr Pat Rabbitte, called on the Government to draw up a plan to safeguard technology jobs.