Intel to shutter Costa Rica plant; lays off 1,500 employees

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Intel has announced that it is shutting down its assembly and test operation site in Costa Rica installed in 1998, resulting in 1,500 job cuts.

The company’s latest move falls within a larger plan revealed earlier this year to cut overall costs as the chipmaker attempts to expand its presence beyond PCs into the mobile market.

“It’s being closed and consolidated into our other operations throughout the world,” said an Intel spokesman Chuck Mulloy notes Reuters.

The chipmaker said that relocating its assembly and test operation to Asia is part of a strategy that stresses on “geographic closeness between plants and main markets.”

Mulloy said the company will retain 1,000 engineers, finance and human resources employees in Costa Rica, and is expected to add another 200 “high-value positions” in the same category by the end of the year – leaving a net reduction of roughly 1,300, about a 1.4 percent reduction in its global workforce.

Intel, during the next two quarters, is planning to move assembly and testing from its Heredia site, where it has been present since 1997, to existing sites in China, Malaysia and Vietnam, added Mulloy.

Intel saw its net income fall 13 percent to $9.6 billion last year. The world’s largest chipmaker, which is facing its third straight year of flat sales, had earlier announced in January that it would reduce its global workforce of 107,000 employees by about 5 percent this year, indicating a reduction by about 5,400 employees.

Post announcement, Intel shares closed 1.60 percent higher at $26.91 on Nasdaq.