Aug 12, 2025
Intel Costa Rica: The microprocessor company confirmed in July 2025 the gradual closure of its assembly and testing plant, which will result in between 600 and 800 layoffs in the coming months. These cuts are primarily concentrated in technical manufacturing operations (microchip assembly and testing areas), including production technicians, process engineers, and support staff at the La Ribera plant in Belén, Heredia. Intel did not publicly disclose the exact number of those affected, but legislative sources estimate around 800 employees will be laid off. The measure is part of the company's global strategy to reduce costs following heavy financial losses, which worldwide involves eliminating approximately 15% of its workforce.
MSD (Merck Sharp & Dohme): The multinational pharmaceutical company, with more than four decades of experience in Costa Rica, announced in July 2025 a global restructuring program focused on saving $3 billion annually through 2027. This plan includes cuts in administrative, commercial, and research and development positions worldwide. Merck did not specify how many jobs will be eliminated or detail the specific countries or locations affected, so the local impact in Costa Rica is uncertain for now. That is, no specific layoffs have been reported in MSD's Costa Rican operations at this time. It should be noted that, according to industry reports, Merck could cut approximately 6,000 positions globally in this phase, although in Costa Rica the company had even been announcing recent expansions (for example, 100 new jobs in a clinical data center and 200 in a financial center). In short, the profiles under threat at MSD globally are primarily administrative and scientific (R&D) professionals, while in Costa Rica many of these roles are found in its specialized service centers.
The cuts at Intel and MSD affect strategic sectors of the Costa Rican economy, primarily within the free trade zone regime in the Central Valley:
Technology and Advanced Manufacturing (Electronics Sector): Intel's partial exit is hitting the technology manufacturing sector hard. Intel, along with another pioneering semiconductor company, Qorvo, announced the relocation of its production operations from Costa Rica to Asia. These decisions particularly impact the province of Heredia, where Intel has operated its assembly and testing plant since 1998. The free trade zone in La Ribera de Belén has been recognized as a high-tech zone; it now faces the loss of hundreds of specialized jobs. In addition to the direct impact on Intel, there are indirect repercussions for local supplier companies of inputs and services associated with electronics manufacturing. However, Intel will maintain its engineering and global services divisions in the country with more than 2,000 employees, preserving part of its high-value-added presence in Costa Rica. This means that Heredia continues to host Intel's development and innovation functions, partially mitigating the industrial void left by the cessation of manufacturing.
Life sciences and corporate services (pharmaceutical and related sectors): In the case of MSD, any local impact would be within the life sciences and business services sector. MSD has consolidated financial services centers and global clinical data centers (in San José) in Costa Rica. For now, no massive layoffs have been reported in these operations, but the global announcement generates uncertainty in the pharmaceutical and services sector. This sector, however, has been more resilient and even expansive recently: for example, MSD opened a new oncology data management center in 2023, with dozens of expected hires. The Greater Metropolitan Area (where MSD's corporate centers operate in the free trade zone) and San José (where its headquarters and data hubs are located) would be among the most impacted if local cuts were to materialize. In short, MSD's direct regional impact has been limited so far, with concerns focused on the professional and scientific services sector, which the company leads.
General unemployment and relocation of specialized talent
Despite these layoff announcements, national employment indicators have remained relatively stable and have even shown recent improvement. Costa Rica's unemployment rate stood at 6.9% in May 2025, representing a decrease of 1.77 percentage points compared to the previous year. In absolute terms, approximately 162,000 people were unemployed at that date (90,000 men and 72,000 women). The magnitude of the Intel layoffs (approximately 800 people) is equivalent to approximately 0.5% of that unemployed population, so the direct effect on the national unemployment rate is limited. In other words, a significant increase in overall unemployment attributable solely to these cuts is not expected, given the context of net job creation in other sectors (53,000 new jobs created last year according to the National Institute of Statistics and Census (INEC)) and the relatively small proportion of the total workforce represented by the Intel/MSD layoffs.
The challenge is relocating the laid-off specialized personnel. Both Intel and MSD have highly skilled technical staff with English proficiency and experience in leading industries. Fortunately, these skills are in demand in the local market, and paradoxically, the shortage of specialized talent is a recurring problem reported by companies in the free trade zone. In fact, the lack of trained personnel is the second most important factor affecting the competitiveness of manufacturing companies in Costa Rica, according to the Chamber of Industries. This suggests that many of the laid-off engineers, technicians, and professionals could be relocated relatively quickly to other firms seeking that human capital.
The Foreign Trade Promotion Agency (PROCOMER), together with Intel, has activated a job relocation plan: specialized services are available to place affected workers in other manufacturing companies that require specialized labor. This includes closed job fairs, specific job boards, and possibly specific training to reorient skills. During the closure announcement, Intel emphasized that they will "treat people with care and respect" and support them throughout the process, which typically translates into competitive severance packages and outplacement assistance. In the case of MSD, since no local layoffs have been confirmed, an internal relocation plan has not been activated; however, the company maintains internal mobility and professional development programs that could absorb employees whose roles may be eliminated globally.
In short, the immediate impact on overall unemployment has been contained, and there is potential for relocation of specialized technical personnel, supported both by existing demand in dynamic sectors and by public-private initiatives to re-employ these workers in new positions.
Medium-term outlook:
Government authorities, including the Ministry of Labor and the foreign trade sector, have emphasized that these cuts are primarily due to global corporate decisions and not a fundamental deterioration in the country's conditions. The Ministry of Labor (MTSS) has generally indicated that it will provide support to affected workers, ensuring compliance with their labor rights (payment of benefits, etc.) and facilitating their connection to emerging job opportunities. While the MTSS has not issued detailed public statements on the Intel/MSD case, it has historically collaborated with employment platforms in similar situations (for example, by establishing job boards with CINDE and COMEX in 2014 for former Intel employees). An official stance of calm and monitoring is to be expected, trusting in the resilience of the local labor market.
For its part, the Costa Rican business sector has reacted with a mix of concern and a call to action. The Costa Rican Chamber of Industries (CICR) expressed its concern about the economic impact of Intel's departure, noting that it serves as a wake-up call regarding the need to strengthen the country's competitiveness. Industry representatives have convened roundtables to discuss solutions and mitigating measures, with high-level meetings following Intel's announcement. Among the concerns expressed by business leaders and analysts are structural factors such as the cost of electricity, logistics infrastructure, talent availability, and labor flexibility. For example, it was mentioned that the non-approval of the 4/3 workday (12-hour workdays) may have made Costa Rica less attractive compared to other locations.
Outplacement in existing companies: As mentioned, PROCOMER and CINDE are channeling Intel's technical profiles to other multinationals in the country that require personnel with experience in advanced manufacturing. Companies in the medical device, precision electronics, and engineering services sectors have expressed interest in hiring some of these professionals. For example, corporations such as HP, IBM, Boston Scientific, and Sykes already absorbed laid-off ex-Intel employees in 2014, and a similar trend could be repeated now given the current demand for electronics engineers and technicians.
New investment arrivals: Simultaneously with these outflows, Costa Rica continues to attract new technology-based companies. A notable example is Applied Materials, the world's largest supplier of semiconductor manufacturing equipment, which established its first Latin American operation in Heredia in 2025.
Growth of other dynamic sectors: Costa Rica has diversified its foreign investment mix. Sectors such as medical devices, business services, and digital technologies continue to grow and demand personnel. The country is currently the second-largest exporter of medical devices in Latin America, with multiple plants in the free trade zone that regularly require process engineers, quality personnel, and skilled operators.
In conclusion, despite the initial impact of the layoffs, the outlook is not one of stagnation but rather of transition: Costa Rica has an ecosystem capable of reabsorbing much of the released talent. The combination of outplacement efforts, new investment arrivals, and the dynamism of alternative sectors indicates that many of these highly qualified employees will soon be able to reintegrate into the labor market, even contributing their knowledge to boost other industries.
Sources:
Intel Costa Rica, MSD, and official press releases; Semanario Universidad; El Financiero; La Nación; Diario Extra; Repretel; data from the INEC and the Ministry of Labor; statements from the Chamber of Industries and COMEX. All figures and statements have been supported by press reports and official sources to ensure the accuracy of the analysis.