Central Bank of Ireland governor Gabriel Makhlouf said that the slew of technology job losses in Dublin in recent weeks amounts to a “pause” by the sector globally following a period of rapid growth during the Covid-19 pandemic.
The comments came as data published on Thursday showed that the number of people in the State listed as employed in the information and communications technology (ICT) sector fell by 11,000 – or 6.6 per cent – over the course of the third quarter, to 158,800.
However, the latest figure was up 12,300 on those employed in the sector in September last year and 28,500 ahead of the 127,300 people working in that area at the end of 2019, before the virus struck.
They also predate recent announcements of Irish job cuts by groups such as Twitter, Facebook-owner Meta and Stripe as part of global restructuring programmes.
“What we saw during the pandemic was rapid growth in that sector,” Mr Makhlouf said in response to questions from reporters at the publication of the Central Bank’s latest biannual financial stability review.
“What I’ve seen announced by that sector in recent weeks and months is a pause, and a reduction in that growth. I haven’t yet seen anybody say they’re going to go back to where they were before the pandemic.”
“I think it’s a recalibration of their growth plans in the light of everything that’s happening in the global economy.”
Mr Makhlouf said that slowdown should serve as a reminder of how much the international ICT sector has contributed to soaring Irish corporation tax receipts in recent years and need for caution on this in future.
Corporate receipts, mainly paid by a small number of large multinational companies whose European headquarters are based in Ireland, have risen by more than 400 per cent in the last 10 years, according to the Department of Finance. Its chief economist, John McCarthy, said last week that corporate taxes could reach €22 billion this year.
IDA Ireland’s head of technology Donal Travers told the Committee on Enterprise, Trade and Employment on Wednesday that there has been no slowdown in the pace of inward tech sector investment this year despite a sharp reversal in fortunes for some of the world’s biggest tech companies.
However, he said that while there is a “healthy pipeline of investments” from multinationals for next year, there is “definitely a slowing pulse for the year ahead”.