US microchip giant Intel announced Tuesday it was reducing its assembly and testing operations in Costa Rica and will lay off 1,500 employees.
The move was a major blow to the economy of the Central American country, where 2,700 people were employed at an assembly plant installed in 1998.
"After extensive analysis, the company concluded the best long-term solution to maximize the operational efficiency at the global level was to close its assembly and testing plant," Intel said in a statement in Spanish.
The company will still employ more than 1,000 people to work in engineering, research and development, customer support, finance, and human resources, it said.
Intel's exports made up just over 20 percent of Costa Rica's overall exports in 2013, though most of the material used to manufacture them had been imported.
The computer chip giant had announced in mid-January it was going to lay off five percent of its workforce worldwide in 2014, cutting around 5,400 jobs, as it tries to combat the effects of the stagnating market for personal computers.
Intel saw its net income fall 13 percent to $9.6 billion last year.