Grupo Nación, Merck Downsizing Workforces

Two prominent companies in Costa Rica, publisher Grupo Nación and pharmaceutical company Merck Sharp & Dohme, announced department cutbacks and layoffs this week.

The announcements came amid reports this week that as many as 2.4 million Latin Americans could lose their jobs this year in the wake of the global economic downturn, the International Labor Organization (ILO) said Tuesday.

Merck Sharp & Dohme will close its packaging plant in the western San José district of Pavas at the end of 2009, making about 104 employees expendable, according to company spokeswoman Irene Arguedas.

Grupo Nación, which publishes the newspapers La Nación, Al Día, La Teja and Vuelta en U, said the restructuring is a result of reduction in advertising. The group will lay off 25 people, cut budgets of all areas by 15 percent, and eliminate Vuelta en U’s print product, turning it into an online-only newspaper.

“The employment crisis has arrived in the region,” ILO’s regional director for Latin America Jean Maninat said in Lima, Peru.

Bucking a three-year trend, Costa Rica’s national jobless rate increased from July 2007 to July 2008, from 4.6 percent to 4.9 percent.

Outside the region, layoffs in rich nations will also drive down economies here, as workers abroad cut back on remittances they send to Latin America each month, which in Central American and Caribbean countries make up more than 10 percent of GDP.

The slump will hurt tourism too, according to the World Tourism Organization. In Latin America the sector saw growth of 2 to 3 percent last year – far below the 6.6 percent growth of 2007 – and tourism looks set to rise at most 2 percent this year, if at all.

–Alex Leff