Intel is cutting 1,500 jobs in Costa Rica as it takes steps to cut 5 percent of its workforce by the end of the fiscal year.
The job cuts, which will happen over the next two fiscal quarters, are at a site that does chip assembly and testing, said Chuck Mulloy, an Intel spokesman. The assembly and testing operations will be moved to sites in Malaysia, Vietnam and Chengdu, China, where similar functions are already performed.
“We’ve been clear for over a year now we have to get more efficient in the way we operate,” Mulloy said.
The move will also put assembly and testing closer to PC and mobile device makers, which are now mostly in Asian countries. The ability to ship chips quicker could help accelerate the release of products from device makers and also cut costs.
Intel typically tests chips before shipping products out to PC and device makers. The Costa Rican site was also used to package chips shipped from Intel’s factories in the U.S., Israel and Ireland.
The site in Costa Rica will remain operational, focusing on research and development, engineering, and finance, Mulloy said. The company plans to hire 1,200 people to perform those functions.
Intel had 107,000 employees at the end of December last year. The company announced in January that it would cut 5 percent of its workforce this year.
Intel’s PC chip shipments have dropped as more users move to smartphones and tablets for computing. Intel has a very small presence in the mobile-device market, and much of its manufacturing resources are still focused on PC chips. Intel has said it would ramp up manufacturing of mobile chips as it tries to capture a larger smartphone and tablet market share from ARM, whose processor designs go into most devices.