Big Tech multinationals have laid off thousands of employees in Ireland during the current global downturn, the Central Bank has estimated.
According to new research, 2,300 total jobs have been lost in Ireland from the tech sector, including from companies such as Google, Twitter, Facebook, Dell, Hewlett Packard, Microsoft and others.
Ireland’s largest Big Tech employer, Amazon, is home to 18,000 Irish jobs, and has announced that it will be laying off staff globally. However, it is unclear if any of these job losses will be from Ireland yet.
Many of these companies are letting go thousands of employees globally, and many hundreds in Ireland, as the sector begins to scale down its workforce for the first time in years.
“To date, the scale of the downturn affects a small proportion of overall ICT employment in Ireland,” the Central Bank wrote.
ICT stands for “Information and Communication Tech.”
The bank added that Ireland’s “dependency” on such a small number of large firms shows a “structural vulnerability of the Irish economy” to such global downturns.
It continued that there is “uncertainty over the future growth prospects for the sector,” adding that there is a “risk” that last year’s downturn “could become more severe.”
As it stands the tech sector employs over 164,000 people in Ireland – an increase of 29% since 2019. They also contribute a substantial amount to the state’s corporate tax receipts.
The global tech industry reportedly increased its rate of layoffs by 649% in 2022 – the highest amount since the Dot Com Bubble in the late 1990s. Although only a small percentage of employees have been let go from many of the larger companies, this still translates to thousands of jobs lost due to the firms’ large staff.
One contributing factor to the sectoral downturn is inflation. Many tech companies rely on advertising revenue to make ends meet, and as inflation forces businesses across the world economy to make cuts, ad revenue is down. Additionally, rising energy costs have forced tech companies to be more frugal to keep costs down.
Another important factor is the fact that many companies over-hired during the Covid-19 pandemic years.
During the lockdown, social media use skyrocketed as millions of people who would normally have been at work sat at home with little else to do. This resulted in tech companies taking on far more staff to expand to meet the new userbase.
However, as lockdowns eased globally, social media use fell, resulting in a significant part of the new workforce being superfluous.
All of these factors and more have likely contributed to the mass lay-offs, which already seem to be continuing into 2023.
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