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Intel to ax 1,500 jobs in Costa Rica

The chipmaker's closure of a Costa Rice assembly-and-test operation is part of a plan to cut costs and shift Intel's focus from PCs to mobile.

Intel will close an assembly-and-test operation in Costa Rica this year, eliminating 1,500 jobs as a result.

The closure of the Costa Rica plant is part of a wider plan to cut costs and shift Intel's focus away from the PC market and to the mobile market, which has expanded at a rapid pace in the last few years.

Intel was slow to dive in to the mobile technology realm, and as PC sales fell worldwide, this impacted both profit margins and forced a re-think of the company's future business model. As a result, Intel is rapidly restructuring and is working to build a substantial business in producing chips for smartphones and tablets.

According to a spokesman for the chipmaker, a dwindling PC market has made the restructuring necessary. Spokesman Chuck Mulloy told Reuters on Tuesday that the plant will be "closed and consolidated into our other operations throughout the world." In the next year, the closure of the Costa Rica plant -- which accounts for a significant amount of the country's exports -- will give rise to expanded assembly and testing in China, Malaysia, and Vietnam.

Over 1,000 employees of the Santa Clara, Calif.-headquartered company will remain in the country, serving in engineering, financial, and administrative roles.

In January, Intel confirmed plans to slash its global workforce by 5 percent over this year. Intel's 2012 workforce report states that roughly 105,000 employees are on the books. That means a 5 percent cut will not only hit Costa Rica, but other geographical locations as well.

Intel spokesperson Chris Kraeuter told ZDNet that the company is "making critical decisions to align our resources to meet the needs of our business."

CEO Brian Krzanich has warned investors to expect "a slower recovery in enterprise over the course of 2014."

This story originally posted as "Intel to eliminate 1,500 jobs in restructuring push" on ZDNet.