Too early to say what impact Dell and EMC merger will have on Irish workforce

13 Oct 2015

The US$67bn Dell/EMC merger is most likely being watched with trepidation by up to 6,000 workers of both companies in Ireland.

It has to be the biggest merger in the history of the tech industry, but the US$67bn deal between Dell and EMC is most likely being watched with trepidation by up to 6,000 workers of both companies in Ireland.

Dell employs around 2,500 workers at sites in Limerick, Cork and Dublin.

EMC employs over 3,000 people primarily at its Centre of Excellence in Cork and 50 in Dublin. EMC sister company, virtualisation and cloud infrastructure player VMware, employs 750 people.

Yesterday, the US$67bn merger was agreed, with Dell paying US$24.05 a share plus tracking stock worth US$9 a share in VMware. In effect, EMC is now a part of private company Dell while VMware will remain public with Dell holding a stake in the company.

Trailblazers who played a central role in growth story of tech giants

Both EMC and Dell’s Irish operations played a significant role in each company’s history.

EMC has been based at Ovens in Cork since 1988 and the Egan family who established EMC had Irish roots. The manufacturer started off in Ovens on a six-acre site with 22 people and today employs close to 3,000 people on a 50-acre site on what is the largest EMC manufacturing facility outside of North America.

The EMC facility in Ovens has largely avoided the fluctuations in the tech industry and has grown as EMC has grown.

Dell first came to Ireland in the early 1990s. The company, founded in a college dorm by Michael Dell in 1985, was still pretty much in start-up mode and used call centres and then the internet as its sales channels. The company’s Bray call centre and Limerick manufacturing hubs were critical to Dell becoming an e-commerce powerhouse capable of selling PCs direct online and delivering them within days anywhere in the world.

Dell quickly grew to become one of Ireland’s leading employers with more than 5,000 workers churning out PCs and other hardware.

However, when change came, it was brutal. Dell closed its Raheen, Limerick, plant in 2009 resulting in the loss of almost 2,000 jobs, which devastated Limerick at the time.

Many of the jobs and manufacturing responsibilities were moved initially to Poland and ultimately to Asia as part of a global contract manufacturing deal with Foxconn.

While Dell has continued to invest in Ireland, adding in cloud and internet of things R&D centres in Limerick, bringing employment back up to close to 2,500 people, a precedent had been set that is of little comfort to anyone still engaged in manufacturing in the Munster region.

In effect, it was a reminder that foreign direct investment used to be called mobile investment for a reason and there is nothing permanent about manufacturing in the 21st century.

At the same time there is a war for talent raging and the expertise and knowledge of both Dell and EMC’s Irish workforces who are now engaged in higher-grade activities must surely be a trump card for the expanded tech giant as it considers its next moves.

Not only that, but the reality is EMC is a vastly different company to Dell.

While Dell has harboured ambitions to be an enterprise giant for two decades now, it is a vision that has only been partly realised in terms of server manufacturing and cloud services and ownership of security software vendor RSA.

EMC, on the other hand, was Dell’s partner on the storage technology front for much of this time.

What that means is, while there will always be duplication of roles in mergers, EMC has a set of expertise and know-how that Dell clearly wants.

It is too early to say if the merger will have the impact of workforce reductions here in Ireland. It will most likely be the New Year before the dust settles.

Either way, the local operations of both EMC and Dell have weathered a lot of storms and have pushed themselves higher up the ladder in terms of expertise, engineering and high-end business processes.

They may very well turn out to be core to the whole thing.

Dell servers image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years