Another 200 Irish High-Tech Jobs Lost

by Jason Gorringe, Tax-News.com, London

23 August 2001

Just a year ago, communications equipment maker Tellabs announced a $10 million (Euros 10.9 million) investment in its Irish Republic Drogheda plant, and that it was taking on an extra 150 staff.

Yesterday came the news that the plant will be closed, putting 200 out of work, with fifty-five employees to be transferred to to the company's Shannon plant, where 450 people work, and which is not under threat.

The job losses in Drogheda are part of a worldwide consolidation of operations by the US-based multinational which manufactures optical networking, next-generation switching and broadband access products for the telecoms industry. World-wide the company is cutting 1,000 jobs.

The company said that the cuts would save $120m annually and help Tellabs hit its target of reducing operating expenses by five per cent by the fourth quarter of 2001. Tellabs added that it would take a $50m one-time restructuring charge against third-quarter earnings.

Richard Notebaert, president and CEO of Tellabs, blamed the cuts on reductions in capital expenditure by customers in the telecoms sector. "We have less work for employees and must take difficult steps to preserve Tellabs' long-term health," he said.

Mr John Kohler, senior vice-president of Tellabs global manufacturing division said the change in the industry could not be predicted: "This dramatic change was felt by everyone and happened very quickly. It is a very sharp u-turn in the business. We have seen the revenue of our company drop sharply. We have also spoken to our customers who are experiencing similar situations which forced them not to order products as aggressively as they have in the past," he said.

The Tánaiste, Mary Harney, said it was particularly disappointing given the recruitment drive announced last summer. She is proposing to establish an inter-agency task force and "the main focus now will be to find a new investor and ensure the future employment prospects of those affected".

Ms Harney cut short her holiday in Croatia this week after General Semiconductor announced it would shut its factory in the town of Macroom in county Cork, cutting 670 jobs. She promised yesterday that her department and state agencies, including the IDA and Forfas, will do "everything possible" to support multinationals battling to cope with the fallout from the international economic slowdown. She said she will be carefully reviewing the major multinational employers here with IDA boss Sean Dorgan to assess developments, but dismissed as 'scaremongering' reports that another 5,000 hihg-tech job losses were expected before Christmas.

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