The real story of threats to tech jobs is starting to emerge. Despite a wave of job losses, the tech glass is definitely half full rather than half empty. CSO figures show that 11,000 jobs in the IT and computer sector were lost in the three months to the end of September.
This is a lot more than the public announcements that were made by companies like Twitter, Meta and others. It comes in at around 916 jobs a week gone in that sector over a three-month period.
However, the overall picture remains strong – for now at least. There were still 12,000 more people working in the sector in September than the same month a year earlier.
This highlights the rapid pace at which people were being hired in this industry. Despite the losses, there were still a staggering 28,500 more people working in the ICT sector than at the end of 2019 before the Covid virus broke out.
Most of those who have lost their jobs are probably working in areas like sales, commercial development and related areas
The danger here for the economy really depends on how you look at it. The speed with which 11,000 jobs could be axed is a little alarming. On the other hand, the fact that the industry moved quickly means several of the bigger players may feel they have got their costs down at speed, and have dealt with it.
Another big factor is how these figures relate to jobs in the tech sector, not tech jobs per se. Most of those who have lost their jobs are probably working in areas like sales, commercial development and related areas, as opposed to software engineering or development.
Many of these people may well be able to find jobs doing a similar thing, but not directly in the tech sector.
Perhaps one positive take on it is the fact that if the tech sector in Ireland continued to grow at the previous breakneck speed, its impact on the rental and housing market would have been significant.
A lack of housing would have stopped the sector’s gallop to some extent anyway
Inevitably, some of these workers would be attracted into Ireland from abroad for these jobs and the housing crisis is at breaking point. Even if tech companies hadn’t slowed down, a lack of housing would have stopped the sector’s gallop to some extent anyway.
These are better-paid jobs. And tech companies were in some cases procuring rental properties for staff. But there are trickle-down effects on the overall rental market, where rent on new lettings continues to grow at frightening speed.
Central Bank governor Gabriel Makhlouf said the tech sector had “paused” internationally and in Ireland when it comes to jobs. Given the wider global economic uncertainty it is hard to see how more jobs will not be lost.
However, we would have to see a further 28,000 job losses in ICT before we would be back to pre-Covid employment levels.
If anything these companies were expanding too much too quickly. The current slowdown is a little dose of reality. A little bit of reality is a good thing, too much of it will hurt the economy and the Exchequer.
Will China factory protest make Apple pips squeak?
Scenes of riot police in the Chinese city of Zhengzhou dealing with Foxconn factory workers, appears to have little to do with Ireland. However, those Foxconn workers were protesting about unpaid bonuses they had been promised in light of having to work in difficult conditions because of Covid restrictions.
As Covid case numbers reach record levels in China, more parts of the country will go into lockdown. Foxconn accounts for 70pc of iPhone shipments globally. Most of them are made in that factory in Zhengzhou which employs 200,000 people.
Apple sales of iPhones are massively dependent on what happens in that factory. Irrespective of the work done by thousands of Apple employees in Ireland, our corporate tax receipts are dependent on the overall financial performance of Apple Inc.
Apple has already warned that it expects lower shipments of premium iPhone 14 models than previously anticipated. Reuters has previously warned that iPhone output at the factory could slump by 30pc in November.
The latest bout of unrest adds more uncertainty to the Foxconn plant’s ability to meet targets, especially against a backdrop of higher Covid cases in China with relatively low levels of vaccine take-up.
To some extent these risks have been priced into the share prices of Foxconn and Apple. Foxconn shares had fallen 2pc since the unrest began in October. Apple’s share price is up over 3pc in the last five days and over 1pc in the last month.
The tech giant has not seen its share price affected to the same extent as other technology companies. Apple shares are down only 6.7pc in the last year and by 17pc since January.
Meta shares are down 67pc in the last year. Google and Amazon parent group shares are down 32pc and 47pc in the last year respectively.
The numbers involved in the factory protests at Foxconn are relatively small. However, rising Covid numbers are the main backdrop to potential Apple supply chain challenges.
Budgeting for the North
Northern Ireland secretary Chris Heaton-Harris has decided to press ahead with a budget of his own in the absence of a working Stormont assembly and government. Naturally his announcement talked up increases in various budgets allocated to the North while lamenting the fact that he has had to do this at all.
The education budget needs to have significant cuts to its “current spending trajectory”, he said.
One figure of note which he lists is the fact that the budget confers 20pc more per head of population than other parts of the UK. Subvention to the North remains very high and the Northern Ireland secretary also lamented the £660m (€768m) plus overrun spend by the previous administration in Stormont.
Its profit after tax rose to €2.8m in 2020 compared to €139,000 in 2019. Public transport fares look set to rise and the new austerity in London under Jeremy Hunt may well be coming to Northern Ireland.
The reality is the North has a golden opportunity to push forward with its economy on the back of the unique position it holds in the UK and EU markets because of the protocol. This is about future FDI.
I spoke to one international executive recently who plans to make a major capital investment in the North. He said labour costs were 20pc lower than across the water and 40pc lower than down the road in the South.
Clare firm's PPE payout
An Ennis-based company that won €102m in contracts from the HSE for PPE equipment at the start of the pandemic paid out nearly €4m in dividends to shareholders last year. EKO Integrated Services had contacts in China which helped it to source large quantities of PPE for the health service quite early on in the pandemic.
Its profit after tax rose to €2.8m in 2020 compared to €139,000 in 2019. Accounts for 2021 show its retained earnings fell to €1.2m after paying a €3.28m dividend to shareholders.
EKO is owned by an unlimited liability company called Reginald Investments which in turn is owned by a private partnership.
As a secondary supplier, most of the money the HSE paid would ultimately go to the PPE producer in China.