Iona Technologies is to close its office in Beijing, China, as part of its cost-cutting drive announced last week.
Iona had carried out research and development in China as well as sales and other supporting functions. The office is mostly staffed by Chinese nationals. It is not expected the company will cut significant numbers of staff at its Irish or US offices.
A spokeswoman for the company would not confirm the closure and said Iona would provide further details of its cost-cutting proposals when it announces fourth-quarter results later this month.
Last week Iona was forced to issue a detailed trading statement which showed revenues for the quarter were likely to be $18 million rather than in the range of $20-22 million which it had previously guided.
Chief executive Peter Zotto said the Nasdaq-quoted software maker would take "meaningful cost reduction actions" to cut operating expenses by 10 per cent.
Iona employs about 45 people in the Asia Pacific region, the bulk of whom are employed in Beijing and at a Japanese sales office.
Iona has successfully built links with the highest levels of Chinese government and its offices have been visited by the former state premier Zhu Rongji and the current premier Wen Jiabao.
Although he no longer has an executive role in the company, the decision to close the China office is likely to be embarrassing for Dr Chris Horn, the company's co-founder and vice-chairman of the board.
Dr Horn was one of the co-founders of the Ireland-China Association in 2000. He is also chairman of Slí Siar, a consultancy he founded with US citizen Nicole Bernard in 2005, which provides business services to firms entering the Chinese market. Although Iona has disappointed the markets in three out of the last four quarters, it is still generating cash and expects to close the fourth quarter with a cash balance of $56 million.
