TEL AVIV, ISRAEL -- Tessera Technologies will close its plant here and sell another in North Carolina due to falling profits at its digital optics business.

Along with the plant closings, Tessera will lay off or otherwise cut its workforce by 180 employees, or 40%.

The digital optics unit makes up 25% of Tessera's revenue, with the remainder coming from licensing chip packaging and related technologies. It posted an operating loss of $23.3 million in the third quarter.