Intel Corporation (NASDAQ:INTC) has announced it will shut down its assembly and test operation factory in Costa Rica, which will result in 1,500 employees losing their jobs. The closing of Costa Rica plant will help Intel focus its energy and resources towards the mobile market instead of the PC market.
Intel spokesperson Chris Kraeuter told ZDNet that the company is making important decisions to streamline resources to meet business needs.
Intel to focus more on mobile efforts
Intel Corporation (NASDAQ:INTC) has fallen way behind in the development and opportunity of the mobile technology, and profit margins have been slipping as PC sales have been declining globally. Intel is now working to reorganize the company along with working hard to find a niche in the smartphone and tablets markets.
Chuck Mulloy, a spokesperson for Intel Corporation (NASDAQ:INTC), said that the declining PC market share called for the restructuring of the company. Chuck, in a statement to Reuters, said the plant is “being closed and consolidated into our other operations throughout the world.” After the closing of the Costa Rica plant, assembly and testing opportunities will expand in China, Malaysia and Vietnam.
Intel Corporation (NASDAQ:INTC) will retain its 1,000 employees in the country serving in engineering, financial and administrative roles. Costa Rica president Elect Luis Guillermo Solis said in a conference that the decision taken by Intel is in no way influenced by the change in the political situation. Solis said that the decision was not made based on market or government pressures.
Follow up of the cuts announced earlier
Back in January, Intel Corporation (NASDAQ:INTC) reaffirmed that it will cut global manpower by 5% over this year. According to Intel’s 2012 report, the company has around 105,000 employees throughout the world, and the cuts in Costa Rica are only the beginning. The chip maker decided to reduce its workforce by over 5,000 shortly after posting dismal fourth quarter earnings reflecting the slowing PC industry.
In January, Intel Corporation (NASDAQ:INTC) stated that its factory in Chandler, Arizona, a project worth $5 billion that was to start producing Intel’s most advanced chips, would remain closed for the foreseeable future whereas other factories are being upgraded.
At that time, spokesman Chris Kraeuter told Reuters, “This is part of aligning our human resources to meet business needs.”