Image by Shana Byrne
Large multinational technology companies have announced layoffs across the board. This has naturally impacted Irish workforces – particularly in Dublin, long-cited as the ‘tech capital of Europe.’ Business & Finance speaks to experts to find out what is happening.
By David Monaghan, Deputy Editor, Business & Finance.
“I didn’t really realise when they kind of said this in July, how certain it was.”
I am speaking to someone who has recently lost their job as a digital sales representative for a multinational technology firm.
“I kind of thought it was […] on the table, or everything was kind of kept hush-hush […] until they [knew] for certain what they’re doing.”
The tech worker, who wishes to remain anonymous, started the job in May 2021 and remained in their position for under two years.
“I came on board through a specific programme that they were doing at the time that was supposed to be launched globally across the company,” they said.
“It was this new thing they were doing where they were showing they could take people from ‘nontraditional’ diverse backgrounds and still be able to train them up in the tech world.”
The employee was actually part of the first branch of this project in Europe: “There [were] 30 of us hired all together from various different locations from around the world, and from various different backgrounds as well.”
Promoted as the ‘new way’ the technology company would be hiring into the future, the sessions stopped a year after this person had been hired.
“The programme was redesigned and rejigged, and then it suddenly stopped. The last cohort they hired ended up only being six people or something, whereas the first two had been new hires of 30 each time.
“That was the first kind of red flag that […] something weird is going on because when we came in as the first, it was very much told to us that this is how it’s going to be for the next so many years, this is how they’re going to be hiring everybody into the company into the positions we were in.”
Originally, their team was told that the business was redesigning itself at the turn of the fiscal, a fairly common occurrence.
“They would say the business would always redesign itself […] look at how the business is running and how everything is running and see if it still suits the business.
“Then we were just brought into a call […] that was back in July and August. There [were] months of slight uncertainty, but they didn’t tell us straight away that we’ll be gone, stuff will happen.
“It wasn’t until November that they called us all into a big team call and let us know that the roles were being completely dissolved.”
This tech worker is one of many who has recently found themselves made redundant in the Irish tech sector. Larger multinational companies have scaled back on employees and resources.
In February 2023, Google announced it will cut 240 jobs from its Irish workforce, citing a “volatile economic environment.”
Earlier that same month, eBay announced it would cut 500 jobs worldwide, 4 per cent of its global workforce. This left many workers in Dublin anxiously waiting, email open in a browser tab, or phone by their side, for a redundancy call.
LinkedIn cut jobs in its recruitment team globally. TikTok announced job losses, too. As did Microsoft, Amazon, Meta, Twitter, Paypal.
Often positioned as the ‘tech capital of Europe,’ Dublin has attracted large multinationals in droves. This seems incongruous with the recent wave of lay-offs.
Image by Moira Malone
What happened?
“Much of the analysis would seem to suggest it was a combination of the pendulum swinging too far as the tech firms rushed to keep up with the demand and growth catalysed by the pandemic and the economic stimuli put in place to combat it,” says Cathy Savage, Head of UCD Careers Network, Blackrock, UCD Smurfit Graduate Business School.
Indeed, at the height of the pandemic, we saw the development of digital processes increase on a large scale.
Sean Davis, Regional Director for Enterprise Ireland North America, noted in September 2020 that the interactivity of EI’s MS Teams increased 4000 per cent over a 6 month period.
Professional services firm KPMG surveyed 1,300 CEOs in January and February 2020, and conducted a follow-up ‘pulse’ survey of 315 CEOs again in July and August the same year, for its annual global CEO report.
“As the location of our International Headquarters, our Ireland base is integral to the future of our company,” says the [Meta] spokesperson
The survey revealed that the pandemic significantly or, in some cases, permanently altered business processes worldwide.
77 per cent surveyed said they would continue to build on their use of digital collaboration and communication tools.
This was an unprecedented shift in perspective – for consumers, employers and employees – on how companies operate.
Many turned to online retailers for food, groceries, personal shopping, and more.
Increased investment in the technology sphere would, naturally, follow increased reliance on or demand for digital processes.
“While the layoffs seem significant in total numbers, if you look at the growth curves of the large tech companies, many of them have essentially only retrenched back to the scale they were at eighteen or twenty four months ago,” continues Savage.
“It’s easy to forget just how rapid the scale of growth in the tech sector was – some firms grew staff numbers by 30 per cent plus in under four years. And these are not start-ups, these are large-scale entities, so any retrenchment has implications for huge numbers of people.”
Susi Geiger, Full Professor of Marketing & Market Studies, University College Dublin, echoes Savage’s sentiments, noting what we are seeing is a transition from a ‘hyper-growth model’ of some 30, 40 or 50 per cent growth at the pandemic’s peak to “something that resembles this more sustainable growth model that is maybe, you know, 5 to 10 per cent growth a year.”
“I don’t think it’s much more alarming than that, to be honest,” she continues.
Professor Geiger cited the increase in what people call the ‘stay at home’ stocks, like Netflix, Spotify or Peloton.
“Consumer spending went very heavily into these areas because you couldn’t spend money on anything else. Now I think that’s being corrected.
“Some of these, especially the younger companies, are quite heavily leveraged […] And there’s also the fear that consumer spend overall would be affected by inflation.
“Certainly we’ve seen that with Netflix subscriptions. I think [they are] actually down year on year. People are obviously looking at what spending they can cut from their discretionary budgets.”
Geiger also suggests that this is a “signal to investors that tech and tech companies are willing to be a little bit more prudent with their spending.”
Pictured: Cathy Savage, Head of UCD Careers Network, Blackrock, UCD Smurfit Graduate Business School
She notes that, anecdotally, she has heard the salaries offered by larger technology companies are “twice [or] three times the average” of “normal white collar salaries around town.”
That is to say nothing of the perks offered by larger tech firms, like stock options, gyms, laundries, and so on.
The tech worker I spoke to agrees with this assessment.
”Getting the job in the first place was a huge kind of uptick in my life,” they say.
“I’d never worked in an industry like this. To put it completely bluntly, I had never been paid close to what this was before. So, this was life changing in terms of the salary I was receiving.”
Geiger continues: “So there was a lot of money pumped into hiring and keeping talent and obviously it is a bit too much. And that’s a correction now and I think it’s a signal to investors as well.”
“It’s recession proofing,” says the tech worker.
“But then, at the same time, most of these companies are still making record profits. So it’s almost like, yes, it’s recession proofing, but […] Was it just that you guys over-hired […] realised that you don’t have the money to pay [staff], and then you end up laying off a lot of people you took on?
“I personally do think at some stage it must just be down to a lot of poor planning in the hiring process.”
Who is impacted?
“It appears layoffs were at all levels but mainly impacting on mid to senior level career professionals,” says Savage.
“While their skills are still in demand, the biggest impact for those laid off will be having to readjust salary/benefit expectations in line with the current market.
“Many are still on gardening leave so the real time impact on the labour market is a little difficult to see right now but it’s reasonable to expect downward pressure on remuneration.
“It will be a while before we know, because in comparison to their US colleagues, many Irish tech employees were given generous gardening leave.
Professor Geiger cited the increase in what people call the ‘stay at home’ stocks, like Netflix, Shopify or Peloton. “Consumer spending went very heavily into these areas because you couldn’t spend money on anything else. Now I think that’s being corrected.”
“Some are on paid notice for two/three months which may delay their job search for the next role and thereby delay market effects of those moves.”
The tech worker I interviewed spoke of a ‘generous’ redundancy package offered by their company.
Professor Geiger says those most impacted are in “consumer facing tech.”
“So Netflix, Meta, I think have been quite affected. Amazon too, and also almost by implication, I think we saw, you know, the likes of Stripe announcing layoffs as well, and Salesforce, the B2B stocks.
“You know again, that’s in the context of an inflationary and relatively uncertain environment over the last year with, you know, between war and other economic issues that we’ve seen.”
Jeanne McDonagh is CEO and founder of the Open Doors Initiative, a collective of over 120 organisations who work together with government departments to create pathways to education, employment and entrepreneurship for people who are marginalised.
Those groups include migrants, refugees and asylum seekers, people with disabilities, youths from disadvantaged backgrounds and members of the travelling community, LGBTQI+ individuals, or people with criminal past or any intersectionality within those groups.
“Marginalised people face many barriers at work,” says McDonagh.
“Only 36.5% of people with disabilities were in employment pre-COVID, and 80% of the travelling community are unable to get work. Early school leavers are twice as likely to be unemployed as their peers, and according to the last census, over 1 in 8 people in Ireland are from a migrant background, and they all face barriers and they need help overcoming barriers to education and employment.”
With regard to the tech sector, McDonagh voices concerns for migrants who may suddenly find themselves without work.
“Many need work permits to stay in employment in Ireland and meet their rents, their bills. Many have a life here, build a community around them, build a society, and may have been here for a number of years, and contribute to the Irish economy and society in general, in a myriad of ways.
“So the fact that they have to lose work because they can’t get a work permit or in the case of something like disabilities, where they need a reasonable accommodation and it’s not easy to get that work, and may lead to them leaving employment altogether or even the country.”
Many of the larger tech firms will celebrate diversity and inclusion, offering webinars or themed events around the subject.
The tech worker to whom I spoke was hired under the banner of diversity, as part of a project to encourage people from ‘nontraditional’ backgrounds to upscale in technology.
They continued: “A lot of [recent hires] are non-nationals and the reliance and the importance of these positions to them, I feel, are a little bit more life changing than they would be to even me.
Only 36.5% of people with disabilities were in employment pre-COVID, and 80% of the travelling community are unable to get work. Early school leavers are twice as likely to be unemployed as their peers, and according to the last census, over 1 in 8 people in Ireland are from a migrant background, and they all face barriers and they need help overcoming barriers to education and employment.
“I feel like it’s just a scary time across the board for anyone who has taken the risk to take a job recently in any of these bigger companies.”
This tech worker’s experience bolsters McDonagh’s concerns.
She continues: “Those practices within companies, they’re not trinkets to be pulled down during the good times for awards and so on, and then put away when market forces need contraction.
“Quite the reverse. They have to be amplified, as marginalised people face the most barriers and are most in need at that time.
“It’s corporate social justice and companies with authentic values will actually intensify this work at a time of need and it benefits them because integration leads to social cohesion and stability.
“Numerous studies have shown that it’s really good for business. And even, for example, with existing employees, they thrive in a diverse work environment and many coming into the workplace now expect their companies to mirror their values and are attracted to those companies who do this type of work. So it’s really important that it is amplified now more than ever.”
Where do we go from here?
Larger multinational technology companies are not going to disappear.
“They’ve been here for a long time, for good reasons: a highly educated workforce, [a] beneficial tax environment. Obviously they’re not going to disappear,” says Professor Geiger.
“If we see the sector going back to something [with] much, much more sustainable growth, I think that is, at the end of the day, probably a good thing for everybody.”
That is, “if we see salaries adjusting slightly down to more sustainable levels and more in line with the rest.”
Tech opportunities are still strong in Ireland, according to Savage.
“In October,” she says, “UCD held a Science, Engineering, Technology recruitment fair, 88 large-scale companies attended, with 24 on a waitlist; we literally can’t fit any more companies into the UCD O’Reilly Hall, such is the demand for graduates.”
She continues: “What is interesting to note is how broad the spectrum of recruitment opportunity is – opportunities for those with these skills across sectors in food, financial services, pharmaceutical, professional services, public sector.
“So while it is very difficult for anyone facing a redundancy, they can take solace from knowing the skills developed in the tech sector with the global names will be very transferable to other industry sectors.”
A Meta spokesperson, in response to Business & Finance, emphasised that the company’s Irish base is still central to its future plans.
“As the location of our International Headquarters, our Ireland base is integral to the future of our company,” says the spokesperson.
“It remains home to a number of important company functions including infrastructure engineering, sales, finance, safety and security experts, the Reality Labs team in Cork and the Data Centre in Meath. We are looking forward to opening the third phase of our new campus in Ballsbridge this year.”
This is in line with similar sentiments expressed by Meta’s CEO, Mark Zuckerberg, who, in a post dated 1st February 2023, discussed the ‘year of efficiency’: “We closed last year with some difficult layoffs and restructuring some teams. When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end.”
He continues: “Since then, we’ve taken some additional steps like working with our infrastructure team on how to deliver our roadmap while spending less on capex. Next, we’re working on flattening our org structure and removing some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive.
“As part of this, we’re going to be more proactive about cutting projects that aren’t performing or may no longer be as crucial, but my main focus is on increasing the efficiency of how we execute our top priorities.”
At Tech Nomads, a showcase of tech companies, jobs and teams held at The Complex in Dublin on February 22nd, 2023, John O’Dea, CEO of TechIreland, stressed that, while “it’s no secret that lots of the very largest tech businesses have reduced staff numbers and have announced reduction in staff numbers,” it is “a relatively modest proportion of the total. This is a sector that has grown enormously over the last two or three years.”
In terms of indigenous or regional tech ventures in Ireland, O’Dea said they “surveyed the CEOs of indigenous tech businesses in the last month, and the majority of them said they expected to hire this year.”
O’Dea noted that indigenous tech was “still growing.”
While conversations of sustainable growth, future opportunities, and strong indigenous tech firms inspire optimism, it can be very easy to forget that many have now found themselves redundant.
In the case of the tech worker I spoke to, their job may be eliminated altogether and replaced with artificial intelligence.
“My worry would be that there will be no position to go back to like the position I had,” they say.
“The position I had will never come back at all. It would be kind of down to me to pivot and either train up in something, some other kind of side of it where I can try and get back into tech, or look at an industry shift altogether.”
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