Electronics company Celestica is to shed half of its 500-strong workforce at its plant near Swords in North Dublin after an anticipated improvement in business conditions in the second half of 2002 failed to materialise.
The company has requested 250 voluntary redundancies but if it does not fill that quota by September 1st, it will go ahead with forced lay-offs. The job losses come just weeks after the company signalled its intent to cut its 40,000-strong global workforce by 15 per cent.
However, the company said a number of prospective customers had been in touch with its Irish operation in recent weeks with a view to Celestica supplying electronics to them in the future. The group's general manager in Ireland, Mr Terry O'Shea, said Celestica was committed to maintaining its strategic presence in the State.
A statement from the company said a restructuring plan was being developed and implemented "with the utmost sensitivity and respect for all employees".
"Celestica values its highly skilled workforce in Ireland. This decision was not taken lightly," the statement said. It added that the recovery that was anticipated for the second half of 2002 had not materialised and, as a result, it had excess capacity and staffing in certain areas of the business.
Tánaiste and Minister for Enterprise, Trade and Employment, Ms Harney, said news of the job losses would come as a severe blow to the workers and their families. She said the announcement followed difficult times on world markets and the priority was to ensure maximum personal support to those affected by the announcement.
"The IDA continue to work with the company, and both the IDA and Enterprise Ireland will continue to encourage and attract additional investment to the area," she said.
The Irish workers have been offered a redundancy package of six weeks' pay for every year at the company as well as four weeks' pay in lieu of notice.
Yesterday's news comes just nine months after the Canadian group shed 450 jobs in Swords after the collapse of a contract with Motorola for the supply of electronics for mobile phones and pagers. Before that, the 210,000 sq ft Swords plant was owned by Motorola but that group sold the operation to Celestica in December 2000.
Under the terms of that sale, Celestica paid Motorola $70 million (€71.4 million) for the Swords operation and a plant in Iowa in the US. At that time, 750 jobs were shed representing the largest single loss of jobs in the foreign direct investment sector since Seagate pulled out of Clonmel in 1997.
The latest cuts in Celestica's Irish operations form part of an international scaling-down in the face of lower-than-expected demand. It also announced yesterday it is to shed 500 jobs at its plant in Kidsgrove in central England. The company first announced in July that it planned to axe 6,000, or 15 per cent, of its 40,000-strong global workforce in an effort to reduce production. As well as the cuts in the Republic and Britain, the company has shed 950 jobs in Columbus, Ohio, and about 500 in Oklahoma City. It has not yet said where the remaining 4,000 jobs will go.
The global restructuring will cost between $300 million to $375 million to be recorded by fiscal year-end 2002. The company has been shifting production to countries in Latin America, Asia and Eastern Europe, where costs are lower. It plans to have two-thirds of its output in Asia by the end of next year compared with just 20 per cent two years ago.
