More than 600 jobs have been lost in the north-west over the past six months and it is "inevitable" that further redundancies will follow, IBEC has warned.
In addition to these lay-offs, the number of jobs lost over recent months would be "significantly increased" if downsizing was taken into account, the employers' body has said.
Staff cutbacks are happening not just in traditionally vulnerable industries, such as textiles, but across "a broad range of sectors".
IBEC in the north-west covers Cos Donegal, Sligo and Leitrim and has about 300 member companies. Regional director Mr Padraig O'Grady told The Irish Times that up to 10 per cent of these were reducing staff. He said that since the start of the year prospects had become more uncertain, mainly due to the slowdown in the US economy, the outbreak of foot-and-mouth, inflation, rising wage costs and poor infrastructure and under-investment in the region.
Mr O'Grady said that because the north-west had not experienced the boom like other regions it would suffer more from a downturn. "People in this region don't have options - if they lose their jobs, there aren't others to choose from," he said.
While a slowdown might be welcome in other regions, this was not the case in the northwest, he added.
Nearby, in Co Mayo, there have also been significant job losses over recent months, and again in areas that can ill-afford them.
Last week 146 people were laid off in Volex in Castlebar and more than 200 people lost their jobs in Henniges in Ballina, an unemployment blackspot.
The rate of job creation in the north-west has lagged behind other regions, particularly in foreign companies. Jobs in IDA-supported companies actually declined by more than 1,700 in the five years from 1995. Most of the 600 redundancies over the past six months are in vulnerable sectors such as clothing and textiles and are in Co Donegal. About 300 were at Fruit of the Loom where redundancies announced some time ago have continued up until January of this year.
Co Donegal textile company Unifi has also laid off about 60 people over recent weeks and some 40 jobs were lost at Ballybofey-based clothing company Nena Models.
There have also been redundancies in 10 other companies with the number of people involved ranging from fewer than 10 to 40, and these are in a range of sectors including medical, food, tourism and retail distributing.
There have been a number of job announcements over recent months in the north-west, particularly in Co Donegal.
An American multinational said it planned to expand operations at Letterkenny and earlier this month the Tanaiste announced expansions at five Irish-owned companies.
With a total investment of £8 million, employment was expected to grow by 200 at these five companies but this is over a three-year period. If there is a downturn in the economy, these expected job gains might not be able to keep pace with job losses, as has happened in the case of IDA companies over the past five years.
Mr O'Grady said that in a period of transition, layoffs, redundancy and downsizing would be "part and parcel of our economic development for the future".
He said a key challenge for the Government and State agencies was to move from training people for employment to training people who are already in jobs. The agencies would have to support companies in providing training tailored for their particular needs.
Mr O'Grady also said high pay costs and the terms of the PPF were making it difficult for companies to expand.
SIPTU branch secretary in Co Donegal Mr Sean Reilly rejected the suggestion that the national wage agreement was a factor in layoffs. "No employer who has closed down has quoted the PPF as a reason for it. I don't think the PPF is putting any pressure on jobs in the region," he said.