Intel, the world's largest computer-chip maker, announced on Tuesday that the company will shut down its assembly and test unit in Costa Rica, and lay off around 1,500 employees, according to Bloomberg.
The move is part of a broader plan to cut 5 percent of its global workforce by the end of 2014. The company is struggling to reduce costs as the personal computer market is constantly shrinking. Moreover, it hasn't been able to build a significant business producing chips for smartphones and tablets.
"We have to be more efficient and effective," said Chuck Mulloy, an Intel spokesman.
Assembly and test work will now be consolidated to existing Intel sites in Asia – Malaysia, Vietnam and China. The company had 2,500 employees in Costa Rica before the job cuts. The remaining 1,000 employees will now take care of finance, human resources, and some R&D work. The company may also soon add 200 more employees for "high-value positions", Mulloy said.
Intel had 107,600 employees at the end of 2013. The company runs chip-production factories at three units in the U.S., and in Ireland, Israel, and China. Its most advanced operations are in Oregon, and Costa Rica is a key destination for testing high-end microprocessors.