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A nervous future for denizens of the IFSC
Sunday, September 28, 2008
There is a general feeling there will be job losses in the Irish Financial Services Centre, with many predicting a fall from the current 25,000 down to 20,000, writes Nicola Cooke.

While the apexes of the Irish Financial Services Centre (IFSC) offices may have glinted brilliantly in last week’s Indian summer sunshine, those working there were not warmed by news of the recession and ongoing market turmoil.

Almost 25,000 people now work in this part of the capital that lines the Liffey between the Custom House and Sir John Rogerson’s Quay. Set up 21 years ago by the Charlie Haughey-led Fianna Fáil government of the time, the IFSC was later described by the deceased former Taoiseach as ‘‘the most important step we took in controlling the country’s debt problems, as it was to have a dramatically favourable impact on our public finances’’.

But can the IFSC now withstand the crisis in public finances and an unforeseen credit crunch of a global scale? Last week, a restrained atmosphere permeated the area as workers considered the effects and likely outcomes of the financial crisis. A senior manager who works in treasury said liquidity concerns were his biggest worry.

‘‘The banks are not lending, so there is no source of funding - the Central Bank can’t bail everyone out,” he said.

‘‘We would be looking to get cash in, but for anything past one week’s time, the banks won’t lend. If they can’t lend to corporations or customers, then you are getting a knock-on effect in the whole economy. The only reason so many companies are based here is so they can make money and, if that’s not happening - as, I would say, is the case with about 10 per cent of those in the IFSC, particularly the smaller ones - there will be retrenchment. I can see a workforce of 20,000 here in one year,” he said.

A financial assets controller who works in an insurance company in the area said that, while he was not immediately worried about job cuts at his workplace, he was concerned about ‘‘insurer collapse’’.

‘‘The AIG demise was a bit ‘oh my God’ but their assets are secured in Ireland so there was no risk here,” the 32-year-old said.

‘‘I would be very nervous at the moment about loss of business, and a lack of opportunities to create more. About 15 per cent of our policies last year covered the construction sector, and that is down to 7.5 per cent this year. A lot of SMEs [small and medium sized enterprises] are struggling, but the bigger developers are kept going with NDP [National Development Plan] projects at the moment. There are no other sectors expanding. I expect our company will have a review soon,” he said.

While business was brisk at O’Briens and Munchies take-away sandwich outlets on Mayor Street, restaurants like Milano and Kudos on Clarion Quay were struggling to fill seats during lunch hour. Many suit-wearing workers sat on benches dotted around the open spaces - and in the centre of the eerily quiet CHQ building - and sipped from their take-away coffee and Spar rolls. A few even had packed lunches.

But every cloud has a silver lining, and the baristas at Coffeeangel wore the broadest smiles in the area. Colin Harmon, who served up several steaming coffees mid-conversation, s aid: ‘‘The strange thing for us is, things have got busier. The day the ESRI declared a recession and Lehman Brothers filed for bankruptcy were two of our busiest days.”

‘‘I think it’s a case of coffee is the one luxury people can still afford. They may not be going to the Michelin star restaurants any more. We would aim to sell about 300 coffees a day, and that has been up about 10 per cent in the last two months.

‘‘I think people have less of a workload and like to stop here for a social chat. It’s at the stage where they are laughing and joking about losing their jobs - but you can tell it is there in the back of their minds,” Harmon said.

Mark McGarritty, who works in insurance in the IFSC, said ‘‘people will always need insurance cover’’, which made him consider his job more stable than ‘‘sectors like banking’’.

‘‘I can see the workforce here going from 25,000 to 20,000 next year, but I actually think that might boost the work ethic in many organisations and stabilise others. We got ahead of ourselves there for too long, and people were living beyond their means - mostly on credit. I think people will appreciate more what they have now, and cut back on unnecessary spending,” he said.

Paddy O’Sullivan, who works in AIB’s IT dealing room, stopped to say that ‘‘everyone is now in the same boat here’’ and ‘‘cost reduction is the only game in town’’.

‘‘All my relations are asking me where to put their money, but this thing [market turmoil] has to bottom out at some stage. The bigger Irish banks are probably less exposed, but I can see a squeeze being put on some of the smaller ones round here.

‘‘I think whatever happens politically in the US will have a big bearing on the overall picture – but you’d have to question motivations there with an election in two months,” he said.

Another technology worker, who provides support for the trading systems, described the last two weeks as ‘‘a very exciting time’’.

‘‘From the technology point of view, the systems are being pushed to the limit with the high volumes of market data and tracking,” he said.

‘‘The crisis earlier in the year with the French trader in Soc Gen [the Societe Generale banker accused of making unauthorised bets on stock markets that cost the bank nearly $7.2 billion] gave us an enormous warning and we upgraded our systems to twice the expected maximum volume, and as a result they are holding up okay,” he said.

More concerned about trade than trading systems was Harbourmaster pub and restaurant manager Colm Norton.

‘‘We are a little bit quieter and, while lunches have always been good, there has been a bit of a drop-off in evening trade - but bookings are strong for Friday nights for the next few weeks,” he said.

‘‘Last weekend, we started to see a few free bars at the corporate functions again - I think they are trying to encourage the workers to be more positive and upbeat. People are looking for value for money now though, and good service. Good offers and reasonably-priced food are winning them over in a more competitive environment,” Norton said.

The customer demand for ‘value for money’ was also reiterated by Ely Chq wine bar and restaurant manager Leo Vasileiou, who said many business clients were remaining loyal.

‘‘People are thinking twice now about where to spend their money, and mid-range outlets like Ely that offer good food, wine and service are likely to do well in these times - possibly at the expense of more high-end fine dining establishments,” he said.

So, while opinions on what the future holds for the IFSC remain divided, t hose who work there are united in the hope that it can weather the greatest economic challenge faced in decades.

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