Brakes hit on honeymooning period; laying off staff

Online marketing and tech giant Amazon has hit the brakes on its aggressive expansion in Costa Rica, having enjoyed a honeymoon period over the last five years.

However, the company has now hit a rough patch in the Central American country having carried out its aggressive expansion campaign in Costa Rica, which had resulted in a constant flow of foreign investment and thousands of jobs. Amazon has been operating in Costa Rica since 2008, when it opened a customer service office with 75 employees.

From that point onwards, its presence in the country has grown by leaps and bounds. As of July of 2021, its Costa Rican headcount surpassed 15,000 people.

Nearshore Americas reports that Amazon’s expansion campaign entered into high gear in mid-2017 when it announced that it would hire 2,500 Costa Ricans to cover customer experience and administration jobs, a number which represented half of its total workforce in the country at that time.

More hiring sprees in Costa Rica

In subsequent years, Amazon announced four more hiring sprees in the country. Announcements to hire 2,000 workers were made in 2019, 2020 and 2021. In August 2022, the company had 3,000 customer service positions that it aimed to fill during a job fair in the capital city of San Jose.

Nearshore America has reported that Amazon’s own data showed that between 2017 and 2021, its number of collaborators in Costa Rica had practically tripled from 5,000 to 15,000. Amazon’s recent growth in Costa Rica mirrors that of the company overall expansion during the COVID years, when most businesses and countries were struggling to stay afloat.

For Costa Rica, Amazon’s attention represented a solid piece of footing in times of high uncertainty. However, the high levels of uncertainty have finally hit the tech industry and Amazon is gearing up to survive the upcoming waves, thus resulting in the brakes being put on Costa Rica.

Staff now being laid off

Amazon disclosed last month that it would lay off 18,000 employees from its workforce in Canada, Costa Rica and the United States. The news came months after CEO Andy Jassy warned of cost cutting measures following a year of sky-high inflation and the threat of a global recession in 2023. 

Social media is reporting that between 300 and 1,000 jobs are being cut in Costa Rica but no official number has been put forth by the company. Two senior executives at Amazon’s Costa Rican operations have since announced their departure.

They are Alejandro Filloy, Amazon’s customer service director in Latin America, who had been with the company since 2008, leading operations in Costa Rica and other countries and Jose Chavarria, who led the company’s customer service operations in Costa Rica. Costa Rica’s investment promotion agency, CINDE, stated that, despite the layoffs, the country remains an exceptionally attractive location for global companies seeking a large pool of knowledge workers.

The recent layoffs mark a sudden stop to Amazon’s Costa Rican expansion campaign; a sudden stop that was perhaps inevitable in the wake of its chain of aggressive hiring sprees in the country. As Amazon braces for what 2023 might bring, several of its former employees in Costa Rica are already hunting for a new job.

LAYOFFS WILL CERTAINLY BE FELT BY COSTA RICAN WORKFORCE

Some are shaping their CVs in LinkedIn posts and Facebook groups, making sure to mention that they’re part of the recent Amazon layoffs. Recruiters have taken notice and are also advertising job positions directed particularly at former Amazon employees.

Although Amazon’s layoffs will certainly be felt by the Costa Rican workforce, there’s little sign for worry at the moment thanks to an emerging web of support among peers, as well as the country’s reputation as an outsourcing hub. In the meantime, laid off talents will most probably be absorbed by companies that find themselves in a better position to hire.

Recruiters, executives and other workers in the customer experience space have already launched campaigns to catch any former Amazon worker hit by the recent layoffs. From customer service providers like Accenture and Concentrix to clothing retailer Express and The Coca Cola Company, other businesses are throwing their arms out to catch the talent forced to jump off Amazon’s boat.