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A spokesperson for Flextronics in Cork told ElectricNews.Net that the company cut 50 full-time permanent staff, just days before the Singapore-based contract electronics manufacturer made a global announcement to reduce its workforce by 15 percent. However, these cuts are understood to be part of a set of lay-offs announced earlier in the year.
During this summer, Flextronics said it would cut 80 temporary and contract workers at its plant in Kilbarry, Co Cork. It was said at the time that the cuts were due to falloffs in the holiday season and the downturn in the US electronics market.
When the global cuts were announced last week, a spokesperson for the IDA said it had received assurances from Flextronics that no jobs in Ireland were at risk.
The Flextronics spokesperson said that the decision to cut the 50 jobs was an "independent decision" and not part of the corporate downsizing announcement. The spokesperson for the Cork operation would not comment on the possibility of further job cuts but did say the move showed "consistency within the corporation."
The spokesperson also said the cuts were part of a voluntary redundancy programme and that they have affected a broad range of the firm's workforce. Flextronics in Cork could not comment on the possibility of job cuts in the firms' other operations in Offaly and Limerick.
The company had also announced IEP13 million expansion supported by the IDA last year which was due to create 300 new jobs. The spokesperson would not comment on whether any new jobs had been created as a result of the expansion or on any other aspect of the project. The company would also not say how many it employed in Cork, but is thought that the firm employs around 1,250 in Ireland in all three plants, including around 500 in Cork.
The IDA has told ElectricNews.Net that the expansion is still on track for completion in three to four years. Flextronics also said that it remained committed to its operations in Cork and had no plans to shut down or pull out of Ireland.
According to the company, the 11,500 announced cuts and closures would be in "high cost locations that Flextronics does not expect to use again." It added that it would expand manufacturing in lower cost locations. The news of the massive layoffs in Flextronics came on the day that it announced a fiscal second quarter loss of USD329.8 million or USD0.69 a share. This compares with earnings of USD49.9 million or USD0.10 a share a year ago. Revenues for the quarter were USD3.2 billion in comparison with USD3.1 billion during the same period last year.
As part of its overall downsizing, Flextronics said it would close around four million square feet of production space, or 20 percent of its capacity.
Until now, outsourcing companies like Flextronics have been beneficiaries of the economic downturn. As firms have sought to cut costs, they have in many cases outsourced their manufacturing operations. This year Flextronics has signed major deals with a number of electronics manufacturers including Xerox, Ericsson, Motorola and 3Com.
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