A CO CLARE company confirmed yesterday that it is to cut its workforce by a quarter by making 150 staff redundant before the end of the year in its second "group-wide cost-saving programme" in just two years.
Element Six (formerly De Beers Industrial Diamonds), called staff at its Shannon facility to a meeting at 11am yesterday where they were given the news. In a statement afterwards Element Six said: "The company has informed staff that it intends to reduce its workforce by 150 before year end. These job reductions are part of a group-wide cost-saving programme in the company, not just in Ireland but across the world."
The company manufactures and distributes industrial diamonds and super-hard materials and it products are mainly used in the manufacture of tools for such applications as drilling, sawing, cutting, grinding and polishing of different materials.
Company general manager at Shannon, Ken Sullivan said: "Our major customers include those in construction, automotive, general engineering and the drilling for oil and gas. All of these are caught up in the downturn in global business. In some sectors, sales are running as low as 50 per cent of what we would have expected a few weeks ago."
Element 6, which was established in the Shannon Free Zone in 1960 as De Beers, employs 620 people, including about 120 part-time staff. The company is co-owned by South African diamond giant De Beers and Belgian company Umicore.
In 2006, 75 jobs were lost as part of what it called a "group-wide cost-reduction plan", while last year, Element 6 warned that its operations were under "active review" following Aer Lingus's decision to end its Shannon to Heathrow service.
Mayor of Clare Madeleine Taylor Quinn has blamed the Government and the Department of Enterprise for not heeding the signals and preventing these job losses. "While I recognise the fact that the company has confirmed that the redundancies are part of a group-wide cost-saving programme in the organisation, it must be pointed out that the company's general manager last year indicated its operations were under 'active review'," she said.
"The fact that the company turned pre-tax profits of just over $2 million last year, well ahead of 2005's $9 million loss, shows that rising operating costs, coupled with the global economic downturn, is having a real impact on major multinationals. Questions have to be asked in relation to our cost base and our competitiveness and why, for the past two years when the company had been sending out indicators of difficulties, that the Government agencies responsible, including the Department of Enterprise, Trade and Employment, didn't heed the early warning signs and act to prevent this situation occurring."
Siptu has confirmed that it is seeking a meeting with Element Six over the threatened job losses. "The union regrets the possible loss of high quality jobs, but it has negotiated good redundancy schemes with the company in the past when there was a downturn in the market and it hopes to do so again if necessary."
The company meanwhile has confirmed that it will immediately enter discussions with employees and their representatives.
Workers did not rule out the possibility of management introducing a three-day week. "Management said at the meeting that they needed to cut working hours, and when asked if this meant introducing a three-day week like other companies, they didn't deny it," one employee said.
Clare Fine Gael TD Pat Breen has described the 150 job losses as devastating for the workers and all in the region.