The global macroeconomic environment has become increasingly uncertain in recent months due to a number of factors, including rising interest rates, inflation, and volatile energy markets. Challenges have been felt more sharply in Technology than in other business sectors, after a period of sustained growth for many years. Growth rates accelerated for many technology companies during the pandemic as consumers moved rapidly online and as businesses sought to increase the pace of their digitalisation efforts. Now, after this period of rapid hiring and jobs growth, companies find that they need to reduce their costs and employee numbers in line with reduced revenue forecasts and weakening company valuations. This has led to the announcement of layoffs by Twitter, Stripe and Meta in recent days
IDA Ireland’s Interim CEO Mary Buckley said: “These layoffs are regrettable and our thoughts are with those who are losing their jobs.
IDA continues to monitor the situation in the global technology sector and is actively engaged with its technology client base. We remain in close contact with the Tánaiste and officials in the Department of Enterprise, Trade and Employment.
The technology base in Ireland has been building for over 60 years and will continue to grow in the future, despite current challenges. The companies that have announced job losses in recent days will continue to operate in Ireland and are important companies in the global and Irish ecosystem. IDA’s focus is on the continued partnership with these companies to continue to grow their presence in Ireland and deepen their impact on the Irish economy. The underlying strength in the technology sector is driven by a number of factors, including the pace of digitalisation (across all sectors) and the associated need for new digital infrastructure and services.
Growth in employment in 2021 brought the number of people employed in the FDI sector in Ireland to 275,384, up from 258,558 in 2020. Job losses remained at a relatively modest level relative to the size of the overall portfolio resulting in extremely strong net employment growth last year (16,826 net increase). That investment growth continued in the first half of 2022, returning FDI employment creation plans to above the pre-pandemic 2019 record levels, despite a continuing challenging global environment.”
Mary Buckley continued: “As we have done throughout the adverse events of recent years, IDA is working closely with client companies. The agency continues to win new investment in those sectors of focus that underpin a modern economy including Technology, Financial Services and Life Sciences. We remain attuned to new areas of opportunity for Ireland in an evolving investment landscape as well as exploring emerging areas of opportunity, ranging from digital technologies and microelectronics to advanced therapy medicinal products and developments in the renewable energy sector.
Investors’ commitment to Ireland remains strong and Ireland’s value proposition as a place to do business remains a compelling one. Competition remains fierce though and, amid a volatile external environment, to remain successful in the years ahead, we must remain competitive while working to address immediate issues related to the carrying capacity of the economy including housing, energy, water, infrastructure and planning as well as policies supporting talent and skills development.”