Intel cutting jobs in Ireland: Five things you need to know
INTEL’S Irish staff have been dealt a blow today with news of job losses as the company restructures against the backdrop of a slowdown in the home computer market.
And if the chip giant’s decision to cut 12,000 jobs worldwide is probably more a reflection of where the company is rather than Ireland’s place in the bigger picture, there’s no room for complacency.
Intel chose Israel over Ireland for a massive multi-billion investment back in 2014 and Ireland’s cost competitiveness needs to be kept in check as highlighted in a report just a week ago.
1. Intel employs over 5,000 in Leixlip, Co Kildare, Shannon and Cork. The big question is where and how the axe will fall but we don’t have any details yet and staff are not expected to be briefed until next Wednesday, at the earliest.
2. The Intel restructuring is not Ireland-focused and operations across the globe are expected to take a hit as the slowdown in the home computer market hits the giant. So to make up for that, Intel is shifting its focus to high growth areas like chips for internet connected devices and those for data centres, driven by more investment in the cloud.
3. In fact, the 12,000 job losses at Intel come in news of other redundancies at big tech firms like EMC, IBM, and Microsoft. These traditional tech giants are facing new challenges all the time in addition to a shift to the cloud. For example, they can no longer depend on big orders for hardware and software upgrades every few years.
4. Israel gave Intel a 5pc corporation tax rate and a $300m grant when the company decided to invest over $4bn there in 2014 – Ireland and Israel have always competed for Intel investment. Our low 12.5pc corporation tax rate is already controversial and Ireland’s tax treatment of multinationals is also in the spotlight in Europe.
5. While the job losses might be more about Intel itself, Irish cost competitiveness needs to be kept in check. Earlier this month, the Competitiveness Council warned that high legal costs, credit costs, and business services costs are a worry.