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April 09, 2014

Intel Vents 1,500 Jobs in Shutdown on Costa Rica

Costa Rica's export market took a major hit recently as Intel (News - Alert)—itself faced with some significantly shrunken markets for its PC lineup—shut down its Costa Rica operations. Formerly focused on assembly and testing systems, the shut down took with it fully 1,500 jobs, though the shutdown was said to be in line with part of a larger overall operation as Intel makes some major changes in the way it creates and markets products.

Reports suggest that, earlier this year, Intel's focus was set to be less on PCs and more on the mobile device market, and to that end, the company planned to stage some cost-cutting measures designed to give it a better vantage on the mobile front. Intel spokesman Chuck Mulloy noted that the Costa Rica operations would be “closed and consolidated into our other operations throughout the world,” and indeed, the cuts in question do seem to line up to plans that Intel announced previously, in which it cut its workforce of a reported 107,000 employees by about five percent in 2014. A cut of 1,500 workers, meanwhile, represents about 14 percent of that goal in one fell swoop. This isn't the first time that Intel has made some cost-cutting measures, either; back in January, the company noted that it was keeping the new Fab 42 facility in Chandler, Arizona offline, while instead making some upgrades to other factories in the region.

However, Costa Ricans who lost jobs in that hit may have a new opportunity with Intel later this year, as reports suggest that there will still be over 1,000 jobs still left in Costa Rica, particularly in research and development operations as well as engineering, human resources and finance. Plus, there's word of new jobs on the way, with 200 “high-value positions” expected to be involved. Intel also made it clear that the job losses had “no relation to the election of the new Costa Rica government or the market conditions for...potential foreign investment,” according to a statement from President-Elect Luis Guillermo Solis' office.

As painful as this will be for those who lost jobs—particularly in an economy where finding new jobs is increasingly difficult—this is keeping with Intel's overall strategy as it makes a move away from PCs and moves into mobile devices. With the PC market on the decline in terms of overall sales and mobile devices downright exploding in terms of overall sales, it's going to prove a smart idea to keep Intel in this new fray as much as possible. Intel's already lost quite a bit of ground to companies like Qualcomm and even Samsung (News - Alert), so the more that Intel can do to get itself in the mobile device game, the better it is for the rest of the company.

While the PC is likely not going away any time soon—there are simply too many uses for this device, and just as much for laptops—there will likely be progressively less call for said devices, and that in turn means that fewer resources will go into the manufacture of same. Fewer resources means fewer jobs, as the market adjusts to face a new reality that is less about PC and more about smartphones and tablets. It's a normal market maneuver, even if it is one that put a bunch of people out of work. Still, hopefully those displaced can find new work in similar fields, as other markets rise up to take the place of the one that fell.  

Edited by Alisen Downey

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