Intel Restructuring Takes Employee National Morale Day to Costa Rica

By Jon C. Ogg Published Apr 8, 4:53PM EDT

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Intel Corp. (NASDAQ: INTC) is taking our version of Employee National Morale Day south of the United States, to Costa Rica to be precise. Shortly before the closing bell, Intel announced that it would be transforming its operations in Costa Rica. Transforming brings layoffs – some 1,500 of them.

After holding meetings with the Government of Costa Rica and the Investment Promotion Agency, Intel confirmed today that it will transform its operations in Costa Rica. As part of its global strategy, the company will relocate its assembly and test operation to Asia, where these activities will be concentrated.

Intel’s said that its Global Services Center and its Engineering and Design Center will remain in their current location in Belen, Heredia. The company further said that these two operations will gain relevance in research and development related activities.

The semiconductor and processor giant said that the decision in Costa Rica is on top of other changes recently made by the company in other locations as well, as a part of strategy shift in the last year. Intel even said that its restructuring process has been showing gradual impact in all of its global operations as it seeks to optimize its efficiency and adapt to new market conditions and competition in the technology sector.

As a reminder, Intel announced on Monday that it would be changing how it reports its segment operations as well. These changes will be to break down the revenues into the following groups:

PC Client Group (PCCG) – will now include the results of our gateway and set-top box business, previously reported as the Service Provider Group within the other Intel architecture operating segments.
Data Center Group (DCG) – will now include the communications infrastructure portion of the Intelligent Systems Group, which had been previously reported in the Other IA operating segments.
Internet of Things Group (IOTG) – this newly formed IOTG includes the embedded portion of the Intelligent Systems Group. Wind River Software Group (Wind River) will also transfer from the software and services operating segments to be part of the newly formed IOTG.
Mobile and Communications Group (MCG) – includes the Phone Group, the Tablet Group, and Multi-Comm, all previously part of the Other IA operating segments.
Software and services operating segments – The software and services operating segments will reflect the removal of Wind River. McAfee, Inc. (McAfee) and the Software and Solutions Group will continue to be part of the aggregated software and services operating segments.
All Other – will now include the remaining components of the Other IA operating segments: specifically, New Devices Group and Netbook Group. All other will continue to include Non-Volatile Memory (NVM) and Corporate.

Pacific Crest just issued an Outperform rating with a high price target, but that call was not tied to the news regarding Costa Rica. Intel shares rose by 1.6% to $26.91 on Tuesday against a 52-week range of $20.80 to $27.12.

About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.