THE number of people employed at state-assisted companies dropped by over 6,500 last year.
But although the number employed fell by 6,521 in 2010, this represented a major easing in job losses -- during the previous year state-assisted firms lost 32,362 jobs.
A total of 18,351 jobs were created last year in the sector, but this was offset by 24,872 job losses.
Forfas said the drop showed "a softening in the contraction in the economy" last year.
The figures were released in its Annual Employment Survey for last year.
The survey showed 275,693 people were working in companies assisted by IDA Ireland, Enterprise Ireland, Shannon Development and Udaras na Gaeltachta.
Employment in Irish-owned firms stood at 136,385, a drop of 3.5pc on the previous year.
In contrast, employment at foreign-owned companies was 139,308 at the end of the year, a fall of just 1.2pc.
However, part-time employment has grown in both Irish- and foreign-owned firms.
It has grown by over 8pc at Irish companies and by over 14pc at foreign-owned firms.
"While there continued to be employment losses due to plant closures in 2010, approximately four-fifths of losses are being generated by companies who are continuing to trade but are reducing their staff numbers," the report found.
In the industrial sector, the areas that suffered the most significant job losses were non-metallic minerals, down almost 15pc, construction and utilities, down 11.6pc, and manufacturing and chemicals.
The services sector bounced back in many areas, including computer consultancy, where there was an increase of 1,025 jobs, a 4pc rise since the previous year.
But business services were down 634 jobs, or 4.9pc, while financial services recorded more modest employment losses of 368 jobs, or 1.8pc.
Across the regions, the number of jobs dropped by 13.7pc in the south and east of the country since 2001, less than a tenth of which were lost last year.
The Border, Midlands and West suffered losses of 15.6pc, while jobs in Dublin were down 9.8pc between 2001 and last year.