Fallout: The Financial Crisis

Dell job cuts fuel Ireland’s recession

Renita Jablonski Feb 26, 2009
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Fallout: The Financial Crisis

Dell job cuts fuel Ireland’s recession

Renita Jablonski Feb 26, 2009
HTML EMBED:
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TEXT OF INTERVIEW

Renita Jablonski: Dell reports earnings today. The company was once the biggest exporter in Ireland. Not anymore. Dell just announced a couple thousand job cuts in the country.

It’s a move business professor Frank Barry at Trinity College in Dublin predicted. He joins us now. Professor Berry, what does this mean for Ireland as it’s also sliding deeper into a recession?

Frank Barry: With the exception of Iceland, we’re suffering the most severe downturn in growth of any industrialized country. So it comes at a particularly difficult time for us. And thus as the other hardware firms had stopped assembly activities in Ireland, their workers were able to get new jobs relatively easy over the course of the boom period. Now, that’ll be much difficult over the course of the recession.

Jablonski: And we’re talking 2,000 jobs here.

Barry: And that’s a much more substantial number in Ireland, of course, than it would be in the States. So it’s, yeah, Dell is losing about half of its work force here in Ireland almost overnight.

Jablonski: And what is the corporation, Dell corporation, then gaining with this move?

Barry: It had established a factory in lots in Poland, and about three or four years ago, that was carrying on the same kinds of activities as it was doing in its Limerick plants. So now, it’s simply migrating its assembly operations to Poland, where wages are about one-fifth the equivalent wages that it was paying in Ireland.

Jablonski: So the people in Ireland that will be left without jobs, where do they go?

Barry: Many of them will simply go on to the unemployment roles for a period of time whilst they’re seeking new jobs. But there’s major talk of a return to emigration, which of course has been the blight of Ireland for 150 years or so. But with the downturn in Britain and the U.S., Australia seems to be the new destination of choice.

Jablonski: Well, what about prospects for recovery with the recession?

Barry: Well, that’s it — when I mentioned adjustment costs there, that typically means, you know, how long workers remain unemployed. And the real difficulty then for Ireland, of course, is that the depth of our recession will increase the length of time that unemployed workers spend on social welfare roles.

Jablonski: Frank Barry is a professor at the school of business at Trinity College in Dublin. Thanks so much, professor.

Barry: Sure, you’re welcome.

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