THE US electronics company Key Tronic, which is one of Dundalk's biggest employers, has laid off 78 temporary staff.

Key Tronic, which makes computer keyboards for the European market, said the lay offs became inevitable after some of its principal customers reduced their orders significantly because of a downturn in demand for their products. Sixty one of the employees being laid off are full time workers for the company while the remaining 17 are employed on a part time basis.

Key Tronic, which employs 445 people, sells its keyboards to computer distributors and hardware manufacturers, and exports most of its output. It is understood that two of Key Tronic's main customers have substantially reduced their orders in recent months.

A company spokesman said the problem was due to the cyclical nature of the computer business. "If you look at the business level we have, you see highs and lows."

Key Tronic, which established its Dundalk operation 10 years ago, has received about £3.6 million in grants from IDA Ireland. It does not issue separate financial data for its Irish operation but has an estimated turnover of £23 million.

The lay offs at Key Tronic come less than a week after Intel announced that it was laying off just under half of its 500 temporary staff due to weaker than expected demand for certain computer components.

The lay offs are in Intel's motherboard assembly and system assembly divisions, but its main microchip manufacturing plant has not been affected. Intel employs more than 2,200 people at its Leixlip, Co Kildare site, and is to create a further 2,000 jobs in a $ 1.5 billion investment over the next two years.