Intel has decided to shut down its R&D center in Bucharest, Romania. According to a highly-ranked manager at the company, about 200 software engineers working on IoT and Android projects will lose their jobs.
Intel is also winding up its Intel education team based at Cluj-Napoca, Romania. The company's employees have already been notified.
The layoffs in Romania are part of the chip giant's plan to reduce costs and focus on profitable areas of the business. Intel will cut 12,000 positions worldwide, and most of the targeted employees will be notified over the next month, according to a letter from Intel CEO Brian Krzanich's sent on April 19.
The decision came as a surprise to many, especially for the Romanian IoT team, which had only been assembled late last year. Krzanich said in the same memo that the Internet of Things and datacenter businesses are the company's "primary growth engines".
"Intel's potential decision to close its office in Bucharest is part of the company's strategy and has nothing to do with Romania," Andrei Pitis, president of the Employers' Association of the Software and Services Industry, told ZDNet.
"We're sorry that they're leaving. However, there are other technology companies planning to set up shop in Romania in the near future. They're analyzing the Eastern European market, and Romania ranks high," he said.
Senior IT recruitment consultant Maria Hostiuc said the tech sector in Romania has no jobless engineers and the need for skilled developers remains high.
"The 200 people that used to work for Intel will find other jobs quickly, no doubt about that," she said.
Embedded software firm Wind River Galati, acquired by Intel in 2009, will continue its activities. However, the status of Intel's sales and marketing group in Bucharest is unclear.
The Romanian-registered Intel Software Development SRL had a turnover of €12.5m ($14m) in 2014 and net profits of €0.9m ($1.01m), up 14 percent compared with 2013.
Intel opened its Software Development Center in Romania in 2010. The company has had a presence in the country since 2005.
Intel in Romania has been contacted about the closures but declined to comment.
The Romanian Software and Services sector thrived last year. It turned over €3.08bn ($3.44bn), up 21 percent on 2014, according to a recent study published last week by the Employers' Association of the Software and Services Industry.