Minister for Public Expenditure Michael McGrath has described the announcement of job losses at Meta as a dark day and has vowed the Government will help in any way it can.
The tech giant announced on Wednesday it was cutting 11,000 jobs, some 13 per cent of the social media company’s 87,000-strong global workforce.
In Ireland, the cuts are set to impact Meta’s 3,000 directly employed staff, the company told Irish staff on Wednesday morning, although the scale of the lay-offs is not yet known. If the 13 per cent figure cut is applied to Ireland, about 390 Irish jobs could be lost although sources believe the final figure could be higher.
Mr McGrath told RTÉ Radio’s News at One that Facebook would be fully complying with its legal obligations with regard to redundancies and had shown respect through their dealings with the Government.
The company had emphasised its long term commitment to Ireland as an international headquarters, he added.
When asked if there was a risk that the country could tip into recession, Mr McGrath acknowledged that if forecasts went wrong the country’s finances could go into “negative territory”.
The country’s economy was broadly based and was not completely reliant on the tech sector, there were also large pharmaceutical, financial, gaming and agri-food companies contributing to the economy.
Ireland was dependent on external demand, he said. “That is a reality. That’s what we have to focus on, remaining competitive.”
Speaking as he arrived in Government Buildings for the weekly Cabinet meeting on Wednesday, Tánaiste Leo Varadkar said it was important not to “catastrophise” the downsizing and confirmed there had been regular contact between the Government and Meta over the past week.
“We have been in contact with Meta over past few days and are in contact with the company today. The way the rules work is that they inform their shareholders and the markets first, and inform employees.
“We do not know yet what the scale of the losses will be or over what time period it will happen,” he said.
“My thoughts are with the employees. It is a particularly bad time of the year to receive the news, particularly in the run-up to Christmas,” he added.
Mr Varadkar said he had been assured by the company it would comply with Irish employment laws and that meant there would be a period of 30 days where employees would receive information and be consulted.
There would also be an exit package paid by the company. The average salary of Meta employees in Ireland is €110,000 not including share options.
He said the Government would make sure those being let go would get the help they needed to find other jobs, adding there was still many jobs in the tech sector.
Speaking on RTE’s Prime Time on Tuesday night, Mr Varadkar pointed out that Meta had doubled its workforce in the past few years.
“This is a sector that has expanded very rapidly in the past few years. Tech boomed during the pandemic, expanded very quickly,” he said.
He said it was important to put the decision in context.
“The future is digital. It’s artificial intelligence. It’s augmented reality. It’s cloud computing.
“Whatever retrenchment we see among some companies or in the sector as a whole, I still believe, in the medium to long term, this is still a growth area.
“It’s important not to catastrophes or to exaggerate or to create a false impression and scare people because that is not a public service.”
Mr Varadkar said he did feel for the staff in Twitter about the way its redundancy was handled this week and how they received the news of being let go. “I don’t think that was right,” he said.
Asked on Wednesday about the State’s reliance on corporation tax from a small number of global companies, he said it was a “good thing” to have a number of big companies that paid a lot of corporate tax.
“It’s a positive thing. It’s also a vulnerability. It’s why we are running a budget surplus this year. We are setting aside money in a reserve fund that recognise that vulnerability, knowing we can withstand a reduction in corporate tax (next year).”
Meanwhile, Minister of State Peter Burke said that although there was “huge uncertainty” within the tech sector at present, the growth levels that had been predicted could not be sustained.
Speaking on RTÉ Radio’s Today with Claire Byrne show, Mr Burke said he did not want the message to go out that the sector was “crumbling”.
His solidarity was with the workers and their families, the State would not let them down and would provide supports. There were statutory redundancy rules by which the companies would have to comply.
“We are trying to secure as many jobs as we can”.
Sinn Féin’s enterprise spokesperson Louise O’Reilly reacted to the announcement by saying her thoughts and solidarity were those workers who would lose their jobs.
“The company must now use the 30 day consultation period to minimise redundancies and maximise redeployment,” she said.
“The Oireachtas Committee on Enterprise and Employment now needs to urgently hear from the IDA to get a broad view of the sector and the necessary actions needed to save jobs, diversify and future-proof.
“It underlines the need for an Irish Enterprise Agency promoting non-export focused indigenous business. The government must be working to ensure that we are not over reliant on one sector or a small number of companies,” she added.
