Monday, July 27th, 2015 | USD: Buy 528.29 / Sell 540.71
April 7th, 2014 (InsideCostaRica.com) Intel’s Costa Rican unit will lay off some 1,500 employees and move its manufacturing operations to Vietnam, according to reports. The layoffs would represent more than half of its total staff in the country.
According to reports, the US chip manufacturer will retain some 1,200 workers in Costa Rica, mostly working in its service operations.
Local economists are warning the move could have significant effects on the economy.
Intel’s closure of its manufacturing operations will have a direct impact on the country’s exports and produce a drop in the country’s GDP, economists warn – estimates indicate that Intel’s manufacturing operations represent 5% of the country’s entire GDP and a significant percentage of the country’s total exports.
Between 1997 and 2010, Intel represented an average of 6% of the country’s total direct foreign investment.
Economist Melvin Garita said there would also be serious indirect consequences of the move. Intel has important local supply chains – and the closure of Intel’s manufacturing operations in the country will affect between 2,500 and 3,500 people who work as part of those supply chains, Garita said.
Government officials have remained tight-lipped on the reports since rumors of the closure began last week, and have refuted rumors that the move is the result of high electricity costs in the country.
Costa Rica’s Minister of Foreign Trade, Anabel Gonzalez, told reporters that the company would be giving “important announcements” in the coming days.
Communications Minister, Carlos Roverssi, said the government would not address the issue until the company makes a formal announcement of the closure.