A US-owned customer service company operating under Costa Rica’s free trade zone program has cut its minimum employment commitment by more than half. It told the government it can no longer compete on cost with call centers in India and the Philippines. TTEC Customer Management Costa Rica, which began operating here in 2007 as Teletech Customer Care Management, received approval from the Ministry of Foreign Trade (Comex) to lower its required workforce from 111 employees to 45.The original commitment dates from executive agreement 067-2007.
In its request, the company said it faces growing competitive pressure in international markets, chiefly from firms in India and the Philippines. It said operating costs and salary structures there are far lower than in Costa Rica. The company described that gap as a significant structural disadvantage. It said the disadvantage had weakened its ability to keep international contracts and attract new clients.
TTEC carried out a partial reduction of its staff before seeking the change. It has not disclosed how many people it currently employs in the country. Companies in the free trade zone regime receive tax and customs incentives in exchange for minimum investment and employment commitments. Those commitments are written into executive agreements and can be modified at the company’s request.
TTEC is far from the only company to ask for that change. Executive agreements published in La Gaceta show that at least 38 free zone companies have lowered their employment targets since 2023. Their combined commitments fell from about 38,450 jobs to about 19,864. The largest adjustment came from Amazon, which halved its commitment from 16,450 positions to 8,225 in January. Align Technology lowered its minimum from 4,992 to 2,500 under an agreement published in May. Align said artificial intelligence and automation had raised output per worker.
Service firms make up most of the companies that have reduced their targets. They include IT consultancies, technical support providers, back-office centers, call centers and data processors. The reasons the companies gave vary. Several, like TTEC, pointed to lower labor costs in Asia. Others cited automation and artificial intelligence, or a shortage of specialized talent.
A smaller group blamed the strong colón, which raises costs for companies that earn in dollars but pay salaries and local bills in colones. One of them, Sistemas Globales, estimated that its operating costs had risen by 23.6%. TTEC did not cite the exchange rate in its request. The pullback is now showing up in the overall numbers. Direct employment in free zone companies fell from 197,101 to 195,410 jobs through August, a 0.9% drop, according to Central Bank data published in its monetary policy report.
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 translate into an equal number of layoffs. Some companies are revising targets set at peak hiring rather than cutting existing staff, as Align said in its request.
Even so, the trend points to mounting pressure on service jobs in a regime that directly employs nearly 200,000 people. Those jobs have been among the steadiest sources of formal private-sector employment.
