Intel to downsize Costa Rica operations, several media sources report

The microprocessor giant Intel seems ready to halve its staff in Costa Rica, mostly those working in the company’s manufacturing line, reported several news sources Saturday.

Intel reportedly plans to move its manufacturing operation to Asia and lay off 1,500 employees, according to “well-placed” sources in the company, reported the newspaper El Financiero.

The daily La Nación reported that 1,200 jobs in the Engineering and Design departments would stay at the company’s offices in the Belén free trade zone in Heredia, and that another 200 would be hired.

Microprocessors are Costa Rica’s primary export. Over 20 percent of Costa Rica’s exports in 2013 were microprocessors, worth some $2.4 billion, according to statistics from the Foreign Trade Ministry (COMEX).

Karla Blanco, director of corporate affairs for Intel in Central America and the Caribbean, would not comment, saying, “Intel is known for its transparency and openness with the press. We’re not going to comment on rumors, and when we have something to say we will say it,” she told the newspaper.

La Nación noted that Intel CEO Brian Krzanich said in January that financial pressures would push the company to downsize.

Presidential front-runner Luis Guillermo Solís of the Citizen Action Party said Friday he planned to meet with an Intel vice president next week to discuss the possible layoffs, presumably if he wins Sunday’s runoff election against ruling party candidate Johnny Araya.

During a press conference Saturday, Solís said his administration would work to attract foreign investment in Costa Rica.

“We want Costa Rica to be a country friendly to foreign investment, … based on our [educated] workforce and conditions acceptable for investment from a financial point of view and stability in economic policies.”

Intel has been in Costa Rica since 1997 and has invested $800 million in Costa Rica between then and 2010, according to COMEX, the online daily CRHoy.com reported. Intel employs nearly 2,700 people in Costa Rica.

AFP contributed to this post.

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JasperF

Negotiating to keep Costa Rica’s firmly in the 3rd world. Let Intel leave and look to other up and coming chip manufacturers to come in and hire a trained and motivated workforce.

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Matthew Frederick

There are no other up and coming chip makers. ARM is already established in other countries. They are moving to Asia because that is where most all micrporcessors these days are made in Foundries factories.

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Ben

Shame on Intel. US goverment must have a hand in this just before the election. INTEL SHAME ON YOU. WE WILL NOT FORGET.

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Marvelous Marv

Disappointing news. The thing is the users of these chips are already in Asia and the cost is lower. The only hand involved is the invisible hand of Globalization.

The solution for Costa Rica is to leverage its educated workforce for design and other higher level positions as well as manufacturing of higher value added products for Latin America.

That’s why free trade agreements are necessary.