The Irish economy has been a major beneficiary of the global tech boom, but the sector's downturn exposes thousands of workers to the risk of losing their jobs.

As large Information Technology (IT) firms attempt to reverse losses and revive flagging share prices, the dynamic in an industry that employs about 50,000 people has altered radically.

Just last year the talk was of a shortage of skilled staff as companies expanded relentlessly. Now, with demand from domestic and corporate customers falling, many are focusing on retrenchment.

The impact of this slowdown will not be confined to the international IT sector. Irish firms sub-contracted to larger players, inside and outside the industry, are likely to feel the chill too.

"In any downturn there's an amount of pain and there'll be pain in this one as well," said Mr Martin Cronin, who is operations director of IDA Ireland.

"I think the likelihood is that there'll be more bad news before the downturn ends, but it's impossible to say how long it will last or how severe it's going to be."

He added: "The most telling factor would be how much is the parent company suffering, but it is not the only factor."

However, other sectors remained strong, he said, including financial services, medical devices, pharmaceuticals and market support.

"Our starting point is that the economy is strong and that's never been the case when we were coming into a downturn."

Still, signs of recovery among tech firms are scarce.

According to Goodbody Stockbrokers, the most recent financial results from large players suggest the IT sector has some way to go before a turnaround.

In a research note, its technology analyst Mr Gerry Hennigan said: "Ongoing signs of a slowdown in corporate demand for IT beyond the US continue to provide evidence of a prolonged slowdown for the sector. The net effect is that the outlook now shows few signs of a potential upturn prior to the year-end."

Gateway's closure follows a fundamental review of its Irish business.

It is but one of many firms which flocked to the Republic in the 1990s, only to see their fortunes reversed in the wake of the dot.com boom and a stock market slump in March of last year.

INTEL: With 3,400 full-time staff and 1,200 contract workers at its plant in Leixlip, Co Kildare, the chip-maker is one of the largest US investors in the State. Because its products are used by virtually all the leading equipment manufacturers in the sector, the company's fortunes are seen as something of a proxy for the entire IT industry.

About 1,000 construction workers lost their jobs last March when the company postponed development of a new production operation in Leixlip. A spokeswoman said the company plans to recommence construction of its Fab24 plant early next year.

However, last month it sought "voluntary separation" agreements from 170 staff, in the first sign that uncertainty surrounding its global business would impact on its day-to-day staff at Leixlip. It has also halted recruitment.

XEROX: The troubled copier-maker had highly-publicised plans to create up to 2,000 jobs in Dundalk, Co Louth. But in June about 400 of its 1,000 staff at the plant lost their jobs when the company decided to close its Small Office and Home Office division, which produced ink-jet printers for computers.

While 600 workers are still employed by Xerox in Dundalk, the company no longer plans to increase its presence there.

More than 1,500 staff are also employed at Xerox's European customer service centre in Blanchardstown, Dublin. Asked whether those positions were safe, a spokesman said: "Never say never, but there are no plans currently that I am aware of for any people changes in Dublin."

LUCENT TECHNOLOGIES: The networking company has operations at Blanchardstown, Cherrywood, Cabinteely, and in central Dublin. It employs 900 people.

Worldwide, the company has sought to reduce its worldwide staff by 25,000 in two plans revealed in January and April/May. No Irish jobs were lost in that process.

However, Lucent will seek another 20,000 job cuts as part of a new programme revealed last month. Its spokeswoman said: "A review is under way. No decision has been taken as to whether there will be job cuts or not."

The company, which is restructuring, is assessing its markets and products. "It might be that none are taken out and it might be that some are," its spokeswoman said.

NORTEL NETWORKS: The Canadian systems and networks company, which had employed more than 3,000 staff on both sides of the Border, has shed almost 1,000 jobs since the start of the summer.

In June, some 800 workers lost their jobs at Monkstown, near Belfast, through compulsory and voluntary redundancies, while about 90 more lost jobs in Galway. This was part of a programme to reduce global staff by 30,000.

The company still employs about 1,300 at Monkstown and 700 in Galway and Dublin. Asked whether these jobs were safe, a spokesman said: "From an Ireland perspective, there's nothing else planned."

DELL: In May, the computer maker, employing about 5,000 people at operations in Limerick, Dublin and Bray, Co Wicklow, sought 225 "voluntary separation" agreements from its staff.

Such reductions were sought as the company entered a "more challenging" market, although Dell increased shipments to the Europe, Middle East and Africa regions in the February-April period.

Stating that the company could not comment ahead of its quarterly results next week, its spokeswoman would not comment when asked whether further job reduction programmes were imminent.

COMPAQ: The computer-maker, which employs more than 2,200 people in Dublin, Galway and Belfast, has revealed plans to cut its global workforce by 8,500 this year.

Some 1,750 of those positions will be lost in the Europe, Middle East and Africa division, which includes the operations in Ireland.

The company said it was in discussions with staff on "how the changes may affect us here". Pending the completion of those discussions, it would not comment further.

APPLE COMPUTER: The company, which employs about 1,000 people in Cork, has recently ended production of its Cube product at the plant. A spokesman said this represented only a small element of its business. Commenting on employment at the plant, a spokesman said: "It's fairly stable. It does go up and down, depending on the time of year."

HEWLETT-PACKARD: The Irish Times could not contact a spokewoman for Hewlett-Packard, the computer equipment company which employs 2,200 at Leixlip. In July when it published plans to cut its global staff by 6,000, its human resources manager, Mr Brian Kennan, said he expected the plan to have a "minimal impact" in Ireland. This followed a programme in January to cut 3,000 positions from its global workforce. The impact in Ireland was not expected to be significant.

Other IT job losses this year have included 12 at Trinity Technology; 60 at Norkom Technologies; 11 at Vision Consulting; 17 at Cardbase Technologies; 32 at Cara Group and six at Cap Gemini Ernst & Young.