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Thu, May 01, 2008 - Page 10 News List

Dell to lay off 250 workers in Ireland to help trim costs

THE BIGGER PICTURE Economists said the Dell cutbacks demonstrated that Ireland, a favorite spot for US investment in the EU, has become vulnerable to wider cuts

AP , DUBLIN

Computer giant Dell Inc announced plans on Tuesday to lay off 250 workers in Ireland as part of its global cost-cutting plan, a decision that economists said reflected the rising expense of doing business here.

The approximately 4,500 employees at Dell’s two bases in Ireland were told when they arrived for work of the compulsory layoffs, which are expected to begin in July.

Dell is Ireland’s largest exporter and its biggest technology company. Since arriving in Ireland in 1990, the Round Rock, Texas-based company has developed its biggest European computer-assembly plant in the western city of Limerick and based its European sales and support base in the Dublin suburb of Clondalkin.

Most of the planned job cuts are expected to affect the Clondalkin facility, which includes sales and marketing staff, technical support and other administrative workers. Dell already has shifted most of its previously Irish-based telephone support staff overseas, to locations ranging from Scotland to India.

The newly announced cutbacks are only the latest since Dell — seeking to reclaim its status as the world’s No. 1 computer maker — unveiled plans in May last year to cut 8,800 jobs worldwide.

Most of those jobs are already gone. Dell earlier this month announced plans to close a plant in Austin, Texas, eliminating 900 jobs and to pursue more job cuts in hope of paring US$3 billion in costs annually.

Politicians and economists said the Dell cutbacks demonstrated how Ireland — long a favorite location for US corporate investment in the EU — had grown too expensive and was now vulnerable to wider US cuts.

Edward Walsh, president emeritus of the University of Limerick that has a strategic partnership with Dell, said Ireland used to be spared when US companies looked to prune global expenses.

But he said the cost of wages and energy in Ireland have grown excessively in the past decade, a problem exacerbated by the US dollar’s exceptional weakness against the euro.

“In the past, when multinationals consolidated and cut jobs, Ireland was more or less immune from this activity, but because our competitiveness has dropped, we are vulnerable as never before,” Walsh said. “The economy could slip downwards as rapidly as it came up.”

He described the Dell move as “a shot across the bows” that should spur labor unions to accept either a pay freeze or only limited raises nationally.

Negotiations on a new national wage-pact deal opened last week.

Ireland’s unions are seeking raises that exceed Ireland’s prevailing inflation rate of 5 percent.

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