Dell said today it will axe 1,900 of the 3,000 people it employs in Limerick in the Irish Republic, after deciding to move its factory to Poland. It’s another huge blow to the ailing Irish economy, following the collapse into administration of Waterford Wedgwood earlier this week. In the last 18 years, Dell has become the country’s second-biggest company (and its largest exporter), accounting for about 5% of GDP – indeed, in addition to the staff affected directly, another 6,000 Irish workers elsewhere in the supply chain may also find their jobs under threat. So there’ll be some glum faces in the Dail Eireann this morning.
Dell’s move to Poland, where materials and labour will be a lot cheaper, is part of $3bn global cost-cutting programme – and it’s hard to blame them for that at a time when computer sales are tumbling around the world. Its EMEA VP Sean Corkery described it as a ‘difficult decision, but the right one for Dell to become even more competitive’ – which will no doubt be a huge consolation to the redundant workers. Despite entreaties from the Irish parliament, Dell will only retain about 1,000 jobs at the site, all of whom will work in product development or engineering roles to support manufacturing plants elsewhere in the Dell empire.
Unfortunately for the UK, the job market is looking equally unhealthy here too, judging by the latest results from Hays and Michael Page (two of the big recruitment agencies). Reporting a 22% drop in UK revenue for the fourth quarter, Hays said today that conditions were getting worse in all of its major sectors and markets (not just property and finance); it suggested that ‘every month is getting harder than the last’, and it’s not expecting to see a recovery before 2010. Only public sector and temporary recruitment were noticeably up on last year, while Hays itself has axed about 20% of its own staff this year. It’s a similar story at Michael Page, which shed about 9% of its workforce last quarter as new work continues to dry up.
One consequence of all this, according to the TUC, is that people who still have a job are (not surprisingly) working a lot harder. The union reckons more than 5m people put in unpaid overtime last year, which was worth about £27bn to the economy. ‘The recession will now be making many people scared of losing their job in the year ahead and joining the ever-growing dole queue,’ said general secretary Brendan Barber, who said he was ‘disappointed’ by the finding. We take his point about long-hours cultures being bad for people’s health – but you can’t really blame people for working harder to try and keep their jobs - and keep their company afloat. It might take this kind of commitment to help firms survive the coming year...
In today's bulletin:
Bank cuts rates again to all-time low
Sainsbury's surprises with record Christmas trading
UK job market sinking as Dell axes 1,900 in Ireland
What managers can learn from the England cricket fiasco
A flexible way to beat the January blues