The IT multinational companies in Ireland are in dire straits
DUBLIN: Are Ireland’s Silicon Valley multinational tech firms under threat? The question arises as Meta, Twitter, and Stripe lay off thousands of employees. Even during the COVID pandemic, IT was the sector that provided the country with record tax revenue through remote working and work from home. However, observers say that current developments are frightening.
As per reports, all the major tech companies are in financial crisis for a variety of reasons. Some argue that the problem is that appointments are made without regard for the future. The figures confirm this. Figures show a 9.8% increase in employment in the ICT sector in Ireland between 2019 and 2021.
The IT sector outperformed the health (+6.7%) and public administration (+5.9%) sectors. Companies like Meta and Stripe are widely believed to have increased their workforce without anticipating the upcoming economic downturn.
Reasons… Things…
Mark Zuckerberg, the CEO of Meta, explained that despite the significant increase in investment, there was no significant income, and the company also faced recession and a lack of advertising revenue.
This year, the meta has lost nearly two-thirds of its value. Revenues dropped dramatically when compared to the second quarter of the year. The decline of Meta is thought to be the result of Apple giving its customers more control over their personal data.
Stripe, according to CEO Patrick Collison, is also facing significant challenges. Revenues have tripled since the pandemic began. The company was so confident that it increased salaries as well. However, inflation, energy shocks, high interest rates, and low investment have all declined, according to Collison.
Elon Musk, who took over Twitter at a cost of $44 billion, fired employees en masse because of this uncertainty.
Ways work went off
Facebook, Instagram, and WhatsApp are laying off 13% of their employees. Meta has announced the layoff of 11,000 employees. Stripe cut 1,000 jobs (14%), while Twitter cut 3,700 jobs (50%). Nonetheless, they claim to be struggling to keep up.
Salesforce is also down 2,500 (2.5%), Zendesk is down 350 (5%), Lyft is down 700 (13%), and Snap is down 1,280 (20%). Intel Ireland, which employs 5,000 people, has announced a $3 billion cost-cutting plan for next year.
Significance
Several tech behemoths, including Meta, Stripe, and Twitter, have their European headquarters in Ireland.
In 2019, it received 10.9 billion euros in corporation tax, rising to 15.3 billion euros in 2021. This figure is expected to increase to 20 billion euros this year. The top 10 corporations accounted for more than half of the tax last year.
More than 275,000 people are employed by foreign direct investment companies in Ireland. In addition, the technology sector employs 1,23,300 people. Employees in Ireland were paid the most by Google parent Alphabet (9,000), Apple (6,000), Microsoft/LinkedIn (4,500), and Meta (3,000).
According to September’s annual tax report, the majority of income tax is paid by multinational companies. In IT firms, the average salary is 74,000 euros. It is estimated that these corporations pay 11% of all income taxes.
IDA says not to worry.
However, Mary Buckley, interim CEO of IDA Ireland, believes there is no cause for concern. They also explain that rising interest rates, high inflation, and volatile energy prices have forced businesses to cut costs.
While the layoffs are unfortunate, they believe Ireland’s multinational tech sector will “grow into the future.” Long-term issues such as housing, energy, water, infrastructure and planning are challenges for Ireland in the competition for foreign investment.
Irish Samachar English News
Kindly click the link below to join WhatsApp group chat to get important news and breaking news from Irish Samachar.
Comments are closed.