Ireland’s Tech Job Loss Story from AI? Ker-ching!

Media headlines are full of Dublin tech workers mourning their AI-threatened futures. Yet, we do not hear how if Google, Meta and Microsoft slash their Irish headcounts but keep booking European profits through Dublin, Ireland’s holy-of-holies corporate tax take doesn’t shrink. Corporate profits might actually grow, through leaner operations and fatter margins, all at the same address. Shareholders will only be too delighted.

AI job losses are collateral damage to fatter margins through AI (Shameless use of ChatGPT)

Ireland’s Faustian deal with Big Tech was simple: employ people here, book your profits here at a shamefully low tax corporate rate. It didn’t even require the people to be Irish; a cosmopolitan workforce of Europeans, Brazilians, Indians, and others on glass-fronted campuses was grand. AI has now delivered the human collateral damage.

Tech companies can now keep the second half of the deal, the profits, while quietly walking away from the first: bums on seats. The political response? A mix of ignoring the problem or “lessons-will-be-learned” super junior hand-wringing. We’ve known about the jobs downsides for years.

Of course, income tax will go down with job losses. Income tax is important for stability and planning as it funds hospitals, schools, and public services. Corporate tax take is a slightly smaller amount, but has exploded to over €28bn (18% increase since 2023 alone). The structural nightmare hiding in plain sight remains regardless of AI layoffs or not: Ireland depends on just three companies (US tech and pharma) for €12bn+ alone of the total corporate tax take. That’s not a revenue stream. That’s a hostage situation.

For years, these relatively highly paid workers were the human face of the warm armpit arrangement of whereby tech giants funnel billions through Ireland at a low tax rate. The Dublin “Googletown” crowd enjoyed premium salaries, free lunches and the moral comfort of working for “innovative” companies. They were also, collectively, the socio-political fig leaf that made Ireland’s corporate tax model politically defensible. That’s gone. People are expensive assets.

So, AI means the profits will stay. It’s the people who go. It stings for the laid-off techie to discover that the kombucha-on-tap, ping-pong-table paradise was a human face for some of the most aggressive corporate tax strategies in history that are continuing. They had a good run. They won’t be treated like Debenhams workers were. But the party was always going to end. That may be a good thing in helping clarify some people’s minds about the nature of FDI.

And for those unfortunate enough to be laid off, there are other jobs, provided they have the touch and can stomach buying their own lunch.