150 jobs lost as Philips shuts centre

DUTCH electronics giant Philips will make 150 Dublin staff redundant with the closure of its European accounting services centre in Leopardstown.

The company will relocate the centre, which handles invoicing and credit control functions for Philips’ consumer electronics division throughout Europe, to the Polish city of Lodz.

Philips blamed increased competition in consumer electronics, which include its TV, hi-fi and DVD products, and higher wage costs in Dublin.

Wage costs in Poland are less than half Dublin rates.

“Poland offers cost advantages that were impossible to ignore,” said Remco Steenbergen, general manager of the Leopardstown site. The company will be able to employ skilled staff in Poland for salaries of around €6,000 each.

Philips announced a €400 million cost-cutting programme last year but staff in Leopardstown were unaware of the plans to close the centre until yesterday. In fact new staff were recruited as recently as last week.

Recently-qualified accountants, credit controllers and data processors from all over Europe were employed in Leopardstown to provide administrative support to Philips’ operations on the continent.

Two-thirds of the staff are from outside Ireland. Philips said it would provide opportunities for approximately 50 people to take up jobs with the company in other locations in Europe.

The IDA said it was “surprised and disappointed” with the news. The agency considers shared service centres as an area with significant potential for job creation and one that had seen considerable success.

The Philips closure showed the level of pressure on the Irish economy from competing countries and highlighted the importance of controlling costs.

Three hundred staff at Philips’ remaining two operations in Ireland will be unaffected by the move. The company recently spent €20 million on a new warehouse and office facility at Dublin’s Fonthill Industrial Park.

The Leopardstown facility will close by the end of June. Staff have been offered redundancy payments of eight weeks pay for every year worked, which is in excess of their statutory entitlement, and will also be paid a 30% bonus on top of their salary while they remain on the payroll.

Philips opened the accounting services centre in March 1999.