A company which manufactures breast implants in Arklow, Co Wicklow, is laying off 22 people because of expensive litigation against its parent firm in the United States and "unsustainable overheads".

McGhan Limited, a subsidiary of Inamed Corporation, employs 170 people and exports breast implant products throughout Europe, the Middle-East and some parts of Asia.

The parent company says the huge number of cases taken against it in the United States over the safety of some of its products has necessitated a worldwide rationalisation of its operations. It says the cost of defending past and future cases "vastly exceed the company's financial resources" and only an agreement settling a class suit in the United States allowed it to continue "as a going concern".

A spokesman for McGhan said the remaining 148 jobs in Arklow "should be safe".

However, there remains uncertainty about whether the incidences of litigation against the company in the United States will now cease. According to the latest quarterly report filed by the company with the New York Stock Exchange, "there remains a number of ongoing litigation risks" which may pose a threat to the its future.

These include the possibility of individual lawsuits and the fact that the settlement does not "include several categories of breast implants which the company will be left to defend in the ordinary course through the tort system".

The company has been operating in Arklow since 1989 and is the European headquarters of Inamed.