Central Bank report discloses the extent of tech job losses

A Central Bank report has disclosed the extent of tech job losses within the sector over the 12 months leading up to February. According to the report, the sector experienced over 2,300 job losses during this period, which amounts to more than one in 100 jobs across the industry. Additionally, the IT industry’s job vacancy rate has fallen below the national economic average.

Following the release of the report, Microsoft has announced an additional reduction of 60 positions from its workforce based in Ireland, as part of global cost-cutting initiatives introduced in January.

The report emphasizes that the tech sector remains a significant contributor to employment in Ireland, accounting for nearly one in 15 jobs. It also underscores the sector’s economic importance, with it representing 6.4% of employment and contributing one-fifth of corporation tax revenue in 2021, marking a tenfold increase from 2012.

Nevertheless, the report highlights the sector’s dependence on a few major firms, revealing the vulnerability of the Irish economy to downturns specific to certain companies or industries.

The reported job losses represent 1.4% of total IT jobs or 6.2% of the employment growth in the sector since the end of 2019.

The Central Bank report indicates that the ICT sector’s job cuts have surpassed the economywide average in recent years, despite consistently being higher than the overall average since 2008.

Large tech companies, led by Jeff Bezos’ Amazon with 18,000 layoffs, Alphabet/Google (12,000), Meta (11,000), and Microsoft (10,000), which all maintain significant operations in Ireland, have been most affected.

The report mentions an estimated 2,307 layoffs in the ICT sector in Ireland during the year ending February 2023. For companies that have announced global workforce reductions without specifying their impact on Irish operations, the figure assumes that the layoffs in Ireland are proportionate to the firms’ worldwide workforce based in the country.

It’s important to note that while the losses in Ireland are substantial, they represent only a fraction of the global job cuts in the ICT sector. The Central Bank report indicates a significant increase in global tech sector redundancies in 2022 and early 2023, with a combined total of 160,847 layoffs in 2022 and 120,342 in the first two months of 2023. Although the majority of these redundancies occurred in the US, the impact has been felt in several other countries, either directly or indirectly.

The report also clarifies that the official announcements of job losses within the sector in Ireland are below 1,500, reflecting publicly reported layoffs, which might be an underestimate of the actual job losses. Job cuts by firms that haven’t been publicly disclosed are not included, and estimates are based on the proportion of layoffs in Ireland relative to the companies’ global workforce.

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