News of sweeping job cuts at Motorola and Dell, two technology companies with big operations in Ireland, helped send share prices tumbling on Wall Street yesterday. Two other companies heavily invested in Ireland, Lucent Technologies and Xerox Corporation, were also hit by reports of irregularities in their accounting procedures.
Wireless technology firm Motorola Inc, which employs 130,000 people worldwide, said that it was cutting up to 4,000 jobs in its semiconductor unit as a result of a slowing semiconductor market.
Motorola employs 500 people in Cork, up to 450 in a computer software operation at Mahon Industrial Estate, and about 50 at a semiconductor design centre at Airport Industrial Park. Semiconductor design teams may not be targeted as highly skilled employees are at a premium in the technology market.
Motorola stated that the job cuts were part of a cost-reduction plan that began in the fourth quarter. They would be achieved by ending the assignments of contract and temporary employees, attrition, and both voluntary and involuntary severance programs, the company said. Motorola recently sold its Dublin operation to Celestica, which retained 700 of the 1,450 employees.
"Each of our business units and support organisations has reviewed its circumstances and is making the necessary adjustments to help the sector meet its goals," said Mr Fred Shlapak, president of Motorola's Semiconductor Products Sector.
Motorola is the world's number one producer of embedded processors, and worldwide semiconductor sales last year amounted to $7.9 billion. Dell, the world's number two PC maker, which employs some 5,700 people in Limerick, Bray in Co Wicklow, and Dublin, is reported to be making plans for the first lay-offs in its 16-year history because of the slowdown in the US economy. There is no indication that the Irish operation will be affected by the cuts, which the Wall Street Journal has said could amount to 4,000 of Dell's total workforce of 39,000. Dell Computer Corp shares fell nearly 6 per cent on Friday following the report, which comes against expectations of an extended period of weak profits in the computer market. In January, PC and printer maker Hewlett-Packard said it would eliminate 1,700 jobs and Gateway about 3,000. Asked if the job cuts would affect Ireland, a spokesman at Dell HQ in Austin, Texas, said he could not confirm the report or comment on media speculation.
Dell has initiated a price war to maintain sales which last year rose just 9.2 per cent as personal computer sales slumped.
Meanwhile the US Securities and Exchange Commission is investigating possible fraudulent accounting practices at Lucent Technologies, the world's biggest manufacturer of telecommunications equipment.
The commission is expected to examine whether Lucent improperly booked $679 million in revenue in the fiscal year ended September 30th, 2000. The SEC is investigating how Lucent recorded sales to its distributors, who may not have sold the products, the Wall Street Journal reported.
Last month, Lucent said it would shed 16,000 jobs and take a fiscal second-quarter charge of at least $1.2 billion in a bid to return to profitability. The company employs almost 1,000 people in Dublin.
The struggling Xerox Corporation, which was investigated by the SEC last year, is also under new pressure over its accounting practices. In June the company admitted that it had uncovered serious accounting improprieties in its Mexico operation. A former financial employee has now accused Xerox of "significant accounting and financial irregularities" in other countries as well. Xerox insists that it has thoroughly investigated its operations outside of Mexico and has found no improprieties, said Xerox chairman Mr Paul Allaire. Xerox's European, Latin American and Asian operations were investigated by a team of 35 over six months, Mr Allaire said. The company employs 2,600 people in Dundalk and Dublin.
