DUBLIN (AP) -- One of Ireland's largest employers, computer chip maker Intel Corp., announced Tuesday it plans to lay off 294 people -- or 6 percent of its Irish work force -- in the latest blow to Ireland's unraveling economy.
Intel, which employs nearly 5,000 people chiefly in the west Dublin commuter town of Leixlip, said it had no choice but to trim its Ireland operations because of lower-than-expected demand for its new generation of computer microprocessors. It also cited high labor and utility costs in Ireland as factors.
Earlier this year Intel announced cutbacks and factory closures worldwide but spared Ireland, asking only for 300 voluntary layoffs. But now it will enforce mandatory layoffs for the first time since arriving in Ireland more than two decades ago.
"The affected employees will be given the same severance package that was on offer in the voluntary program earlier this year. At this difficult time, Intel management will be working closely with all affected employees to provide support and assistance," the company said in a statement.
Unemployment in Ireland has doubled over the past year to nearly 12 percent -- second-worst in the euro zone to Spain -- amid a burst property bubble, banking crisis and runaway budget deficit.
An economy that long attracted foreign high-tech companies with low tax rates has suffered a string of job cuts and closures this year, including at Intel's biggest customer in Ireland, Dell Computers. The world's No. 2 maker of laptops in January announced it would move its major European production line from Ireland to lower-wage Poland, slashing its 4,300-member Irish work force in half.
The opposition Labour Party said the Intel layoffs would cost the government the equivalent of euro10 million over the coming year in lost income taxes and higher welfare costs. "We simply cannot continue to afford the loss of jobs at this rate," said Labour lawmaker Emmet Stagg, who represents Leixlip in parliament.