Gateway Computers is reviewing whether it should maintain its European headquarters in Dublin as a result of a major drop in demand for personal computers. The struggling US firm, which employs 900 people in Dublin, warned its Irish employees yesterday of inevitable job cuts and said that "everything was under review".
Coming just a day after Intel said it was going to cut 170 jobs, the review by Gateway will spread further uncertainty across the technology sector, which employs at least 55,000 people.
Mr Mike Maloney, managing director of Gateway Ireland, said the computer maker would undergo a fundamental shift in strategy as growth rates in the industry slowed.
Gateway, which established its European base in Dublin in 1993, is one of the State's flagship high-tech investors. It supplies personal computers to Europe, the Middle East and Africa from its Clonshaugh plant.
Gateway, which has already shed more than 200 staff in Dublin this year, has been hit by a major slump in demand for computers. The company reported a pre-tax loss of $9 million (#10.3 million) yesterday and announced a new plan designed to transform the company from a computer manufacturer into a provider of technology solutions.
Gateway's sales in Europe fell by 46 per cent during the past quarter, making it the worst performing area for Gateway worldwide. Sales in the US and Asia fell by 36 per cent.
Mr Brendan Butler, director of ICT Ireland - an industry association representing the high-tech sector - said that rising labour costs and a lack of infrastructure were contributing to a decline in the Republic's competitiveness.
Meanwhile, the Taoiseach, Mr Ahern, yesterday rejected Fine Gael accusations that he was "heralding the obituary of the Celtic Tiger" by warning of the possible effects on Ireland of the US economic slowdown and the poor performance of many technology companies.
Fine Gael's deputy leader, Mr Jim Mitchell, had claimed that Mr Ahern's comments, to business audiences in Brazil, threatened to undermine confidence in the economy.
Mr Ahern said last night: "We have to be conscious that for the ninth month in a row the biggest fall-off in stocks in the IT sector in 20 years in the US is creating some uncertainty - uncertainty that we should not overly concern ourselves with but should be conscious of and careful about. The successes we have achieved have to be maintained, but there is no question of anyone talking down an economy growing at 10 per cent a year."