Inside Ireland’s Tech Downturn – Experts fear headcount and recession warning

THE global tech industry has gone into a tailspin, with tens of thousands of job cuts over the past few weeks.

And Ireland, where business plays such a crucial role, is feeling the pinch after decisions by Facebook, Twitter, Stripe and Zendesk to lay off workers.

Experts are concerned about the further impact of the technology downturn on Ireland

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Experts are concerned about the further impact of the technology downturn on IrelandPhoto credit: Getty Images – Getty
According to TD Emer Higgins, the technology industry in Ireland continues to grow

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According to TD Emer Higgins, the technology industry in Ireland continues to growPhoto credit: Tony G. Murray Photography

ICT employment here grew nearly 10 percent in the two years to 2021, outpacing even the healthcare sector, which had a huge hiring surge to cope with the pandemic.

Taoiseach Micheal Martin has called for calm, but as tech stocks falter, big companies are being forced to shed staff.

The likes of Meta boss Mark Zuckerberg and Stripe co-founder Patrick Collison have blamed themselves for hiring too much and being blind to a looming downturn while new Twitter boss Elon Musk makes changes, including reinstating the controversial one Account of former US President Donald Trump.

But should we be concerned about the wider implications of the technology downturn for Ireland? Various experts give their opinions below.

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A government TD has warned against “talking your way into a jobs crisis” – but experts have warned the meltdown of the tech giants will continue.

Emer Higgins insists the industry is still growing in Ireland, despite huge job losses here in recent weeks at Facebook, Twitter, Stripe and globally at Amazon and Zendesk.

The Fine Gael politician told The Irish Sun: “It’s important that we don’t talk our way into a jobs crisis.

“We know that some of Dublin’s high-profile tech companies are reallocating their workforce, and many experts tell us they are correcting a too-rapid growth trajectory. The technology industry continues to be a growing industry both globally and here in Ireland.”

Most read in The Irish Sun

But Art Shaikh, head of social media app company CircleIt, warned that during a time of rampant inflation, shedding staff is the easiest way to control spending.

He told us: “The job losses we are seeing across the tech industry in Ireland are a reaction to the struggle to contain inflation around the world.

“Tech jobs have been plentiful, but as ad revenue falls, companies are looking for ways to cut costs, and unfortunately headcount is one of the few expenses that is 100 percent controllable.

“I think there will still be some layoffs from the larger employers, but smaller companies are now in a good position to make changes.”

Meta is to cut up to 400 employees here, Twitter up to half of its Irish contingent and Stripe up to 90 employees.

Amazon, which employs around 5,000 people in Ireland, is laying off 10,000 of its more than 1 million workers worldwide.

Zendesk, a software company with offices in Dublin, is expected to cut almost 5 percent of its workforce worldwide.

recession is imminent

Maciej Markowski, co-founder and co-CEO of Irish real estate tech company spaceOS, has warned Ireland is preparing for a recession – but reckons we will be spared the worst.

He told us: “The majority of companies around the world are preparing for a recession. Tech companies are no different.

“The job losses so far have mainly occurred in areas such as online advertising – which is why Facebook has been hit particularly hard.

“Should Ireland prepare for a recession? Unfortunately yes. Will it be hit harder than other nations? Very unlikely.”

Ireland was the number one destination for US tech companies last year, while multinationals in general employ 275,000 people here.

Thanks in part to tech firms, corporate income tax this year will be around €22 billion – a quarter of the country’s total tax revenue. Treasury Secretary John McCarthy warned that the tech slowdown could hit Ireland hard by 2024.

However, Dublin Mid West representative Emer Higgins insists we have “never relied on this corporation tax revenue” to balance our budgets and the money will be used as “surplus and top-up for one-off expenses”.

DOMINO FEARS

Moira Grassick, COO at employment law firm Peninsula Ireland, worries about a possible “domino effect” after recent job losses.

She said: “The concern would be whether or not this would have a bigger knock-on effect.

“If some of these big tech companies do this, will it have a knock-on effect across the board? This is something we need to be aware of.”

While the news is devastating for the tech industry, she warned that other sectors such as SMEs could be hardest hit.

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Grassick stated, “It could be that the overall impact that it could have on other smaller companies will be the greatest.”

But she added, “I think we have to keep in mind that these companies have hired a lot more people than we would expect in a phenomenal period of time.”

https://www.thesun.ie/tech/9748926/inside-ireland-tech-downturn-job-cuts-recession-warning/ Inside Ireland’s Tech Downturn – Experts fear headcount and recession warning

Fry Electronics Team

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