The closure of Gateway's plant in Dublin will cost the Irish economy more than $50 million (€56 million) a year in lost salaries and payments to local supply firms and contractors who did business with the multinational.
It will also severely affect Irish-based firms which supply a range of services to Gateway from telecommunications to computer components to catering services.
Meanwhile, the computer manufacturer has held its first meeting with members of the eight-strong employee representative council to discuss redundancy terms for the 900-strong workforce. A Gateway spokeswoman said it will be "as generous as possible with the package".
The council members will be holding meetings with the workforce over the next few days and will probably meet with management again next Thursday to report back on employees concerns. So far employees do not appear to have taken up offers from SIPTU or the Irish Congress of Trade Unions to provide assistance or advice in negotiating redundancy packages.
IDA Ireland said yesterday it was difficult to judge the full impact on local firms but it estimated Irish-based firms would lose business worth £6-8 million per year.
Figures obtained from Gateway Ireland's last annual report show wage payments amounted to almost $50 million in 1998.
One of Gateway's services companies, Campbell Catering, said last night it would seek to relocate its 25 onsite catering staff who currently work at Gateway. A spokesman would not rule out job cuts at the firm.
Computer components supplier, ATI Technologies, which has a facility in Swords, said it would not comment on the affect on their own business but acknowledged it was not "good news locally".
Both Intel Ireland and Microsoft Ireland said its contracts with Gateway were made at an international level and would not have a specific impact locally.
However, telecoms suppliers Esat ( which had about 85 per cent of Gateway's business) and Eircom will also lose millions of pounds in revenue.
It is understood Esat is hopeful that Gateway will outsource its technical support services for its customers to an Irish company.
Mr Denis Molumby, head of strategic business for IDA Ireland, said he was quite optimistic that Gateway would leave its technical support in Dublin.
Last night Gateway said that it had received inquiries from six different companies which are interested in hiring some Gateway staff. One of these was electronics manufacturer Flextronics based in Tullamore, Co Offaly.
Meanwhile, Mr Peter Davitt, chief executive of the Fast-track to IT industry group, said Gateway's closure would affect confidence in the sector but cautioned against knee-jerk reactions.
"There is no doubt that announcements such as that by Gateway has an impact on confidence throughout the economy," he said.
Yesterday SIPTU president Mr Des Geraghty said that in light of the downturn in the information technology sector a national strategy was needed to strengthen indigenous manufacturing and services. This could be done through product development, upskilling, infrastructural improvements and developing new markets.
The general secretary of the Irish National Organisation of the Unemployed, Mr Tony Monks said: "Gateway's decision to pull out of Ireland must spark Government action to identify other potential vulnerable industries."
Gateway Ireland's last annual report for 1998, shows turnover of $580 million and gross profit of $92 million. It owed corporation tax worth $1,511,093 for the year.
