Tech redundancies in Ireland: The FSU experience

Abstract

Tech Redundancies in Ireland:The FSU Experience Gareth Murphy (bio) and Niall Cullinane (bio) The "tech sector" frequently features in "Best Places to Work" lists that do the rounds on everything from Glassdoor and WiseStep on the one hand, to Forbes and Fortune on the other. There is no clear definition of the sector. However, it is associated with a medley of information and communication technology (ICT) firms and, in the "popular imagination", perhaps the "Big Tech" of publicly listed American giants of Microsoft, Google, Apple, X and Meta stand out. These firms are famous for their various perks, including on-site gourmet food, parental leave policies, support for transgender workers, health insurance, games rooms and biological botanical gardens. Nevertheless, these benefits and the organisational culture in which they exist sometimes distract from fundamental truths. What sometimes appears to be modern, innovative and "cool" at face value draws a veil over how working relationships in these most modern of firms reflect some relatively persistent inequalities in employment relations more generally. Providing good quality jobs, and the associated fringe package that comes with that is not something we would seek to denigrate. But we cannot detach their provision from the context of unequal power that characterises the environment in which they exist. FSU, and our members, experiences of observing and advising workers in the wave of recent redundancies to hit Big Tech bring that point home quite well. Redundancies in Big Tech Subject to a bout of what the former Federal Reserve chairman Alan Greenspan famously called "irrational exuberance", Big Tech went on a hiring spree during the pandemic. It seems they expected the temporary uptick in demand for their services generated by the pandemic to be the new normal. Meta, for example, almost doubled its headcount from 2020 to 2022 but ended 2022 by organising two rounds of layoffs, dismissing 21,000 employees globally between November 2022 and March 2023. From 2022, the macroeconomic environment changed, creating "cost pressures" for Big Tech. In some cases, like Google and Meta, a slowdown in advertising revenue was the leading driver of these pressures. Between the end of 2022 and the first half of 2023, almost 300,000 employees working for Big Tech employers were laid off worldwide, making headlines in the global media. For some, the development was a surprise; these had been the darlings of the business press, emerging unscathed from the debacle of the Great Financial Crisis and very much a safe bet given how so much of what they do is hooked into our everyday life. In Ireland, there has been a significant increase in the number of redundancies within Big Tech, and according to Eurofound, Ireland accounts for the most significant proportion (around 40 percent) of redundancies in the tech sector across the European Union. Eurofound has observed that this "is not surprising since most of these tech companies' European or EMEA headquarters are based in Ireland". Big Tech's high-skilled workforce is an integral part of Ireland's economy: the broader information, communication and technology sector accounted for one-fifth of the country's corporate tax revenue in 2021. However, between January and May 2023, there were approximately 2300 redundancies in the Irish tech sector, including Google, Indeed, Meta, Stripe, Salesforce, Microsoft, X, Zendesk and many more. While over-hiring and subsequent costs pressure has been the dominant narrative for the cause of these layoffs it is worth considering, at least, two other potential factors. One, is that as the process of "financialisation" has engulfed this sector, and economies more generally, it has caused decisions to be increasingly made to maximise short-term quarterly share price announcements and hit investors numeric expectations on a much more regular basis. This often causes corporations to behave in a copy-cat fashion and so when one announces redundancies others follow. In all the major announcements of redundancies a significant boost in share price is seen in the days and weeks following this. Dr. Jean Cushen of Maynooth University and Professor Paul Thompson of Stirling University have previously argued that this financialisation process has led to much more aggressive human resource management strategies by firms, including redundancies, outsourcing and/or...