Intel's tech job cuts in Ireland start of trend for US firms?
Intel, the US chip giant, had 107,000 global employees at the end of 2015 according to its annual report and added about 3,000 in the first quarter of 2016 with the finalisation of the acquisition of Atera. Last month Intel announced global jobs cuts of 12,000 including about 400 in Ireland. This is part of a trend for US tech firms and coupled with volatile American politics, there are likely to be more job losses in the sector in Ireland.
One estimate put the likely job shedding in the US-owned tech industry at 260,000 in 2016 while in the first three months of 2016, tech companies cut 17,002 jobs. That’s up 148% on the first quarter of 2015 while 72,000 jobs were lost in a 12 month period.
To compound disruption in the tech industry, whether the 45th US president will be named Clinton or Trump, big US companies will find the political environment much more hostile to outsourcing involving what is termed "shipping jobs overseas."
Trump has warned that he would impose tariffs on such firms.
Intel used to give a breakdown of its employee numbers by country location where it had more than 50 but it no longer publishes this information (the chart below is for 2012) while IBM has ceased giving its global head count for some years and its staff cuts are done by stealth over a period, typically without announcements.
The current trend is for big companies to hype up the numbers by estimating the economic impact — Apple with 76,000 employed in the US (mainly in low paid retail and call centers) says:
As of December 2015, Apple is responsible for creating and supporting 1.9m jobs. Nearly three-quarters of those jobs — 1.4m — are attributable to the iOS ecosystem. Our spend and investment with thousands of US-based suppliers supports 361,000 jobs, and we now directly employ more than 76,000 people in the US, representing nearly two‑thirds of Apple’s worldwide team.
How many app jobs are full-time?
Meanwhile Intel said:
In 2013, we engaged PricewaterhouseCoopers to conduct an analysis of the direct, indirect, and induced effects of our operations and selected subsidiaries in the United States over a five-year period. The study, “Intel’s Economic Impacts on the US Economy, 2008–2012,” found that total impact on the US gross domestic product (GDP) from 2008–2012 was $408bn. The study also found that while Intel had 53,200 full- and part-time employees in the US in 2012, each Intel job supported 13 additional US jobs, resulting in total support of 774,600 US jobs. [ ] a 2012 economic impact study showed that Intel Israel directly employed approximately 8,500 employees and interns, and indirect employment exceeded 17,000 additional jobs. In addition, Intel Israel’s direct and indirect reciprocal procurement in 2012 totaled $737m.
These type of estimates are typically bullshit and are made to influence politicians.
On Intel jobs numbers in Ireland, over the past decade it has been commonly stated by the company itself, politicians, IDA Ireland and the media that the chip giant employs about 4,500 in Ireland.
Intel told Finfacts in 2014 that the number employed was 2,800 and it had about 1,700 contract staff in security, canteen and other functions. In 2012 Intel employed 2,500 people in Ireland.
The Irish Times writes today:
Intel has about 4,500 employees and about 700 long-term contract workers in Ireland
The newspaper's current estimate of employee numbers is likely exaggerated, which is inevitable when numbers are hyped up to mislead.
EMC, the data storage firm, and Dell, the PC and server firm, which are completing a merger are significant employers in Ireland and there will be inevitably job cuts when the merger is completed.
IBM is also a big employer in Ireland as is the struggling Hewlett-Packard (HP).
There is speculation that IBM plans to slash about 95,000 or 25% of its estimated global workforce this year.
US-owned firms account for about 72% of foreign direct investment in the Irish exporting sector.