Twitter Goes to Ireland, but Will It Bring Good Jobs?

The company will open an office in Dublin, likely attracted by Ireland's low corporate tax rate. Yet jobs that are a core part of its innovation may not follow

By Bobbie Johnson

A couple of years ago, Twitter co-founder Biz Stone told me that the company was keen to stay small: “Maybe we can be a company of hundreds and still bring Twitter to a huge number of people around the world.”

Stone, of course, is no longer at the company, and it seems the vision he outlined is long gone, too. Boosted by hundreds of millions of dollars in funding, and 100 million active users, the company has been on a relentless expansion plan recently, including starting operations in Britain and Japan.

On Monday, Sept. 26, Twitter announced it was going further, by opening another office in Ireland. The news was confirmed with a brief statement pointing out that Dublin would be “our third location outside of the U.S.” and was “a great next step in the company’s global expansion.” It’s said to be the heart of the company’s forthcoming internationalization efforts.

So Why Ireland?

There is quite a lot of talent in and around Dublin, across important areas such as software development and sales and logistics, but the real reason that Twitter’s gone to Ireland is simple: money.

One of the quirks of European integration is that different countries have different corporation tax rates, and businesses can set themselves up in one country and channel revenue there from others. Ireland has a 12.5 percent corporation tax rate, as well as laws that allow large businesses to easily shuffle money off to tax havens where the situation is even better. This makes it very attractive as the place for non-European businesses to set up their European headquarters—even if it’s not always popular with the rest of the continent.

Google, for example, has received intense criticism for using Ireland as a sort of tax haven: a situation that means it has paid just $12 million in corporation taxes in the U.K. despite having multibillion-dollar revenues.

The topic was addressed recently by Eric Schmidt, who said that of course he’d love Google to pay more tax, but tax laws are too weak, which means the company is obliged to exploit them. That’s creating shareholder value for you.

Irish Concerns

But while I’m sure Ireland—which is one of Europe’s most troubled economies—is largely happy to see any jobs arrive on its shores, not everyone thinks that tempting foreign businesses with low taxes is the way to make the Irish economy sustainable in the long term.
Over on Google+, Dermot Daly, the founder of Dublin-based mobile app developer Tapadoo, asks whether it’s good enough to simply be part of the support layer for multinationals:

“I used to think that when U.S. companies chose Ireland as their European HQ, this was a great thing. High-quality jobs, large employment, etc. Then I worked in one. Doesn’t matter which one. Here’s what I did see: There were a lot of high-paid jobs in it, however the vast majority of them were not working on what one may call ‘core.’

“In fact most of the Irish operation were involved in localization, or employed in the company’s support organization. Not direct support, but support all the same. … [T]he attitude was if it was important, it should be done in the U.S.”

This tension between jobs that are a core part of a company’s innovation and jobs that are merely part of the sales machine is something I’ve highlighted before. In fact, when Twitter first started building out its London office, I asked whether it wanted to genuinely be part of the local culture—hiring developers, making products—or whether it simply saw Europe as a rich sales and marketing opportunity.