The Irish Fiscal Advisory Council's chief economist has said that some slowdown in the tech sector was "inevitable" following exceptional growth last year and a hiring spree.
Responding to news in recent days of looming job losses in the sector, Dr Eddie Casey said some companies are dealing with "unique problems" and while some have over-hired, others continue to do well.
He told RTE Radio's News at One that there was "exceptional growth" last year, which "led to a hiring spree," with changes following the start of the Covid pandemic.
"Many companies benefited from the move to the cloud, people using digital services and online services during Covid that they wouldn't have used in the past," he explained.
"Some slowdown was inevitable there," he added.
Social media platform Twitter last week sent emails to Irish-based staff telling them they were being laid off as part of a global redundancy programme.
Payments system Stripe has also signaled redundancies, while Meta, owner of Facebook, WhatsAp and Instagram, is reported to be planning significant layoffs
There are still vacancies in the tech sector, Dr Casey said, although the numbers involved have fallen off in recent months.
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In relation to the wider economy in Ireland, he said that in the short to medium term the Council does expect a slowdown and that was factored into the Government's forecast for the budget.
That slowdown "isn't expected to be that large," he said.
It will be most pronounced during the winter months and the early months of next year before we see a "slow recovery" later in the year, he added.
Dr Casey said that Ireland has benefited in the past from having a high exposure to technology companies, adding that these companies have tended to do very well in downturns in the past, but there is a large concentration of them here.
He said the sector is highly exposed to a handful of major tech companies so we really need to continue the Government's policy of only growing spending in line with its new 5% spending growth and trying to tie it to sustainable spending growth," he said.
Temporary measures can be used to support households during the cost-of-living crisis, he added.
Noting that ten companies account for over half of all corporation tax receipts in this country, he said that any change to any of those such as relocation or restructuring could have a "big impact" on the amount of tax received.
"We're not forecasting that but it is a risk," he added.
