The news that 240 jobs would be cut from Google’s Irish operations did not come as a total surprise. The tech giant had, after all, announced its global layoff plan in January.
However, while the company said yesterday that it will lose 4pc of its Irish workforce in the coming weeks, that number is far smaller than what was feared in the aftermath of the company’s initial statement.
The fact that job cuts here came in below the 6pc threshold set out by the company’s chief executive Sundar Pichai last month – and with direct employees remaining above 5,000 in Ireland – suggests that Irish operations, while not escaping the layoffs entirely, remain a priority in Google’s overall operations.
In a year of major job cuts by the big-tech firms on which Ireland depends for foreign direct investment, a small reprieve at Google perhaps signals that the impact domestically could be limited.
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Last month, Google joined its big-tech counterparts in admitting it hired for a “different economic reality than the one we face today”.
Following this realisation, chief executive Sundar Pichai said that Google would lay off 12,000 people, more than 6pc of the company’s global workforce.
While Google employs 5,500 people directly in Ireland, just over 4pc of Irish roles are affected, including those in sales, tech and engineering and support functions.
As well as corporate tax, income tax from these high earners is something that the Government would be eager not to forgo
According to corporate filings made in the US state of California and seen by CNBC last month, Google has fired 1,845 people in that state alone – with the majority of those affected at the organisation’s Mountain View headquarters. These Californian cuts represented 15pc of the overall planned.
The redundancies also account for less than half of the almost 34,000 staff that Alphabet, Google’s parent company, added globally in the period from the end of December 2021 to the end of last year, according to quarterly results from the tech giant published earlier this month.
Google remains the biggest employer of all the tech giants in Ireland – as well as one of Dublin’s biggest private companies.
Given the importance of the multinational tech industry in Ireland, it is likely that the Government would have also emitted a sigh of relief to see that the planned number of layoffs here was not any larger.
Corporate tax receipts are increasingly dependent on a tight-knit group of multinational companies in both the pharma and tech sectors, including Google.
While the Government welcomed buoyant corporate receipts of €22.6bn last year (up €7.3bn from 2021), the ongoing alignment of multinational success and subsequent government spending has grown to be a cause for concern.
Last year, the Irish Fiscal Advisory Council said corporation tax funded 20pc of government spending in 2021 – up from 10pc in 2014/2015. More corporation tax was paid in November last year than in all of 2014. This leads to increased fears of over-reliance on income that cannot be guaranteed.
This would also result in a substantial loss to income tax receipts
Those employed by tech giants in Ireland have also benefited from high wages, with many at Google’s Dublin campus earning around €100,000.
As well as corporate tax, income tax from these high earners is something that the Government would be eager not to forgo.
In the annual government taxation report published in September, then finance minister Paschal Donohoe warned that the risk of relying on multinationals was a “significant vulnerability”.
“In the event of a shock to the multinational sector, this would also result in a substantial loss to income tax receipts,” he said.
