FOR YEARS, IRELAND has had a straightforward arrangement with multinational tech giants.

We provide low corporate taxes, an educated English-speaking gateway to the EU, and offer various state grants and support schemes.

In return, the country gets two big benefits. First, thousands of people working in high-paid jobs. Despite only accounting for 3% of all enterprises, multinationals employ about a quarter of the workforce. These staff tend to earn good salaries and pay lots of income tax and USC, helping out with state spending.

Second, multinationals typically shift much of their international profits through Irish corporate entities. 

As these profits are so enormous, Ireland’s 12.5% cut adds up to tens of billions each year, which has massively boosted the public finances.

It’s an arrangement which has worked well for the country. But there are now fears that this is at risk of breaking down, as many big companies appear eager to take an axe to their workforce.

Meta layoffs 

Meta is of course the reason we’re talking about this. During the week, the company announced plans to cut 350 roles in Ireland. Once the latest round of layoffs is complete, its Irish workforce will be less than half the size it was just a few years ago.

It’s worth noting that this came just after Meta announced profits of $27 billion (€23.29 billion) for the first three months of 2026, up 61% compared to the same period last year.

So why is an enormously profitable business cutting staff? Two main reasons have been put forward. The first is that Meta, like many tech companies, ‘over-hired’ during Covid and this is a kind of natural pruning back.

The second is that Meta is going big on AI and it expects the technology to be able to replace many of its workers.

CEO Mark Zuckerberg has said that AI has enabled projects “that used to require big teams, now being accomplished by a single very talented person”.

This is one of the first major AI-related rounds of job cuts which has impacted Ireland. The fear is that it’s a sign of things to come. 

Several other large tech firms with operations in Ireland, such as Cisco and Oracle, are also trimming their workforce amid a shift to AI.

While not of major concern yet, if more tech companies follow suit, one of Ireland’s two major multinational benefits could become threatened. Namely, the number of highly-paid roles could shrink.

The top 10% highest earners pay about 60% of all income tax and USC (Universal Social Charge) in Ireland. By and large, multinationals employ a disproportionate number of these high earners. If lots of them suddenly lose their jobs, the state loses a significant source of money.

This would also have the effect of leaving Ireland ever-more reliant on corporate tax receipts, which are currently single-handedly keeping the country’s finances in the green.

Corporate taxes which are not considered reliable (ie, we can’t guarantee that we will get the same amount of money every year) are called ‘windfall receipts’.

Take these away, and the state’s underlying deficit was about €8 billion in 2025.

There have, of course, been endless warnings about how Ireland should not rely on this money, warnings which the government has almost completely ignored, as it continues to ramp up spending.

This is despite the fact that just three companies accounted for nearly half of the total corporate tax take in 2024.

‘Okay, whatever,’ you might say.

‘We’ve heard these warnings before, and the end result is always the same. Despite all the warnings, the corporate tax take continues to go up.’

While that has been true up until now, AI could make that reliance increasingly shaky.

AI-sparked job cuts

Tech firms are currently in an AI arms race, and it isn’t guaranteed that the giants based in Ireland (and paying tax here) will win.

It’s possible that we end up in a situation where we end up losing out on income tax from AI-sparked job cuts, and one of our big taxpayers goes through a rough patch. 

The scale of the impact which AI will have on jobs is, of course, unknown. 

Some analysts have pointed out that the number of young people (20–24) in employment has remained broadly stable over the last three years or so, despite AI becoming more commonplace.

But there are reasons to think that the true impact of AI on the workforce is only now being felt, as the technology becomes more widely adopted.

Recruitment platform IrishJobs reported during the week that nearly half of employers have scaled back hiring for graduate and entry level jobs. This was attributed to ‘rising costs and increased automation’.

The fear is that we are only now at the crest of the wave. 

And if something were to shake multinational employment, it’s hard to see domestic companies creating similarly high-paid roles.

Figures published in 2024 found that in 2021 (statistics tend to lag), the average wage was €30,400 in SMEs (small and medium-sized enterprises). 

This was below the then-average salary of €35,600. It was also notably below the average of €47,400 in ‘large enterprises’, which includes multinationals.

While the numbers are out of date, the gap has likely remained similar in the last few years.

One reason for the lower wages in Irish SMEs is that they struggle to scale up. New published research during the week found that demand for bank loans from small businesses has remained “muted” in recent years, despite the economy performing strongly.

The authors from the Economic and Social Research Institute (ESRI) noted that a lower likelihood of borrowing negatively impacts companies “investment activity and employment”. 

They also suggested that the low demand may be due to “high borrowing costs or less favourable loan terms” caused by weak competition in the banking sector.

The problem around access to capital is true for different forms of finance. For example, the last business to complete an IPO (initial public offering) and list its shares on the Irish stock exchange was all the way back in 2021.

While indigenous Irish firms have boosted their productivity in recent years, they are still well behind the likes of US tech giants and struggle to scale. They would not be in a position to make up a fall off in income tax and USC if more firms turn to AI to cut roles.

For years, the government has been able to ignore warnings around overreliance on corporate tax and continue to ramp up spending.

While the ‘windfall receipts’ may continue to roll in as multinational profits rise, there is now a risk that this could be offset by a drop-off in taxes from highly paid jobs.

Ireland’s finances are already extremely delicately balanced. We risk becoming even more reliant than ever on multinational profit shifting, which could theoretically be moved away very, very quickly.