Opinion: The announcement last week that IBM would shed up to 13,000 jobs in Europe brought the usual anxious headlines as to how many jobs might be affected here, writes Karlin Lillington
I am predicting with some confidence that it will be few if any jobs. Not because I have a crystal ball or some inside line to IBM management but because, historically, Irish jobs at technology multinationals in the past 15 years tend to be conserved even as swingeing cuts are made globally.
The exceptions stand out so starkly as to prove the rule. Yes, Gateway upped sticks in 2001 with almost 1,000 job losses - the biggest technology casualty of the Tiger economy. Motorola shed 750 jobs and General Semiconductor closed. All painful losses.
But Dell, which around the same time slashed 4 per cent of its global workforce, only had voluntary redundancies in Limerick and is now pushing towards 5,000 employees in the Republic.
Xerox closed its Dundalk facility a few years ago, with the loss of around 400 positions. However, it continues to run its enormous campus at Ballycoolin where some 1,700 people are employed - and this Irish centre was created in the late 1990s even as Xerox was announcing huge job cuts elsewhere. In other words, the Irish operation was established as part of the scheme to cut global costs.
And that is one of the keys to understanding why the Republic, again and again, tends to get bypassed when multinational technology firms are slashing jobs.
The Republic is often where the big firms go to create or centralise the operations which help them cut costs elsewhere.
Back-office operations, call centres, services and support, exporting products developed elsewhere, focused development groups or very high-end manufacturing for products going into neighbouring Europe is what Irish operations tend to do.
Even though the Republic cannot be considered anything but a high-cost economy for multinationals, the tax breaks, skilled workforce, euro economy, proximity to Europe, access to financial services and, not least, a Government that is seen to be flexible and supportive to their operations keeps the high-tech multinationals here.
Consider the companies that have hacked back on employees worldwide in the past decade, sometimes more than 10 per cent of the overall force, and the roster reads like a who's who of the tech sector ithe Republic: Apple, Sun, Oracle, HP, EMC, Siemens, Dell, Ericsson, Compaq (prior to its buyout by HP).
Each time, the anxious headlines appear. But rarely have the Irish workforces even been touched, and certainly not in numbers that matched the percentage reductions demanded worldwide. Ericsson, for example, cut thousands of employees a while back in the UK and Sweden. However, Irish jobs weren't touched that time around.
Some companies that have cut jobs elsewhere, such as Intel and HP, take the route of freezing wages and implementing voluntary redundancies or other cost-cutting measures that, overall, conserve Irish jobs - itself a proof that, for a range of reasons, multinationals see Irish jobs as having a particular value.
Some of the companies that have cut jobs, such as Microsoft, which axed around 100 jobs in a restructuring two years ago, have proceeded to replace them with others - in Microsoft's case, higher-value research and development jobs at a new R&D centre that is a significant tech win for the Republic.
Likewise, while we wait to hear what IBM might say regarding its Irish operations, the company last year pushed €22 million into a new software R&D programme in the Republic, creating 40 new jobs.
Overall, IBM - the first major technology company to base a software operation in the Republic in the 1970s - has, like many other multinationals in the State, followed a path of expansion that has seen it grow from a tiny sales operation to a massive 4,000-person operation around Dublin.
That's why I remain an optimist overall. Yes, there have been big job losses in the technology sector since the downturn in the sector and the overall economy in 2001. Nonetheless, net growth of jobs in this sector over the past 15 years puts those losses in context. They are piffling.
With figures from IDA Ireland showing that job gains in the multinational sector are once again rising after three years of disappointment, the evidence shows, yet again, that Sturm und Drang forecasts from some quarters about the future of the Republic's tech sector, and its broad base of tech multinationals, are unfounded.
klillington@irish-times.ie
