NEARLY two-thirds of Irish companies plan to cut their workforces by the end of this year, according to a survey of managers by consultants PwC.
The survey appears to confirm the widespread impression that Irish companies are engaged in a furious campaign of cost-cutting. Three-quarters of CEOs expect cost levels in their own businesses to either decline or remain the same over the next 12 months, which compares with just 17pc who thought that this time last year.
An overwhelming 84pc are unhappy with the overall cost of doing business in Ireland, with the cost of labour being a major concern -- figures which are likely to have been increased by the rapid fall in sterling.
The vast majority of those surveyed, 86pc, expect to have carried out cost reviews by the end of the year, while 60pc said they will have re-structured their organisations and 80pc will have reviewed purchasing arrangements.
With over half those surveyed expecting a decline in revenue and net profits this year, PwC said business confidence has been "shattered" and is at an all-time low.
But Ann O'Connell, partner, Strategy Advisory Services at PwC, said the survey indicated Ireland will have gone a long way to restoring its competitiveness for the future by the time these plans are implemented.
"(With) firms having undertaken profound reviews of their cost base, we expect a more cost-effective platform to emerge by the time the year is out. While there will be a lot of pain in getting there, especially on the people side, Ireland will have substantially recalibrated its cost base," she said.
A majority of multi-national chief executives questioned in the CEO Pulse survey said Ireland is still capable of attracting certain forms of investment, but only a third said that they themselves are considering additional investment in Ireland at present.
This is half the 61pc which had such plans last year, but the figure may still be seen as satisfactory by some policymakers.
Three-quarters of MNC executives indicated that Ireland still forms part of their future expansion plans, but 15pc did not rule out relocating Irish activities overseas. Half said more favourable intellectual property tax rules would promote Ireland as a place to do business.
"The survey highlights the importance of Ireland's favourable tax regime and, with our strong talent pool, confirms that the fundamentals for continued investment in Ireland remain strong," said Ronan Murphy, senior partner at PwC.