TTEC cuts Costa Rica job pledge to 45, citing India and Philippines
- TTEC cut its Costa Rica free zone employment commitment from 111 to 45.
- TTEC cited lower costs in India and the Philippines.
- At least 38 free zone companies have lowered job targets since 2023.
- Costa Rica free zone employment fell 0.9% to 195,410 through August.
SAN JOSE, COSTA RICA — TTEC has cut its minimum employment commitment in Costa Rica by more than half, telling the government it can no longer compete on cost with call centers in India and the Philippines. Costa Rica’s Ministry of Foreign Trade (Comex) approved lowering the company’s required workforce from 111 employees to 45.
TTEC began operating in Costa Rica in 2007, under the country’s free trade zone program.
Asia’s cost gap, in TTEC’s words
In its request, TTEC said operating costs and salary structures in India and the Philippines are far lower than in Costa Rica, The Tico Times reported on Nov. 4. The company called that gap a significant structural disadvantage that had weakened its ability to keep international contracts and attract new clients.
TTEC made a partial staff reduction before seeking the change. It has not disclosed how many people it currently employs in Costa Rica.
Free zone companies receive tax and customs incentives in exchange for minimum investment and employment commitments. Companies can ask to change them.
A wider retreat from job targets
TTEC is one of at least 38 free zone companies that have lowered their employment targets since 2023, according to executive agreements published in La Gaceta. Their combined commitments fell from about 38,450 jobs to about 19,864.
Amazon made the largest cut, halving its commitment from 16,450 positions to 8,225 in January. Align Technology lowered its minimum from 4,992 to 2,500, saying artificial intelligence (AI) and automation had raised output per worker.
Service firms, including call centers and back-office centers, make up most of the companies that cut targets. Several pointed to lower labor costs in Asia, while others cited AI, automation or the strong colón.
Free zone jobs slip
Direct employment in free zone companies fell 0.9% to 195,410 through August, from 197,101, according to Central Bank data. Central Bank president Róger Madrigal attributed the decline mainly to fewer jobs in administrative support, professional and technical services, and information and communications.
A lower commitment does not always mean an equal number of layoffs, since some companies are revising targets set at peak hiring.
What it means for buyers
The filing puts on record what several free zone companies have told the government: Asian delivery costs are undercutting Costa Rica. For buyers using Costa Rica for nearshore outsourcing, it is a signal to check how much capacity their providers plan to keep there.
Companies comparing contact center locations can review OA’s list of the top BPO companies worldwide.
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