New jobs for some, layoffs for others in Costa Rica

June 12, 2009

In contrast to news this year of Boston Scientific, Firestone and other businesses bringing new jobs to Costa Rica, more companies will likely cut staff in the third quarter than the same period last year, according to a survey by Manpower Inc.

The survey of more than 620 companies across the country reveals a drop of 20 percent from the third quarter of 2008 in the number of businesses expecting to hire new workers, while the number of companies expecting to make cuts has risen 8 percent.

“What we see is that employers are already beginning to have intentions to stop contracting new workers and, in some cases, they are looking to fire workers,” said Eric Quesada, the regional manager of Manpower.

It´s a demonstration of companies preparing themselves to weather the recession, as many have shifted from a growth-oriented mindset to one of maintaining the status quo, he said.

Of the total 620 businesses, only 12 percent expect to hire and as many as 13 percent expect to fire.

Still, as with any prediction, the study gives only a hazy vision of what´s to come.

“It depends on the magnitude of the changes,” said Eric Vargas, the investment strategy manager at the Costa Rican financial consulting firm, Aldesa.

Since the study is predictive rather than quantitative, nothing can be definitively said about how many people will lose their jobs, as opposed to those being employed, both men said.

Unfortunately, employment numbers tend to lag behind other indicators such as economic output.

Officially, Costa Rica has 4.7 percent unemployment, but the number is from July 2008. Marta Argüello, an economist with the Labor Ministry, said it has likely risen to around 6 percent.

Vargas said the jobless rate by year´s end could beat the 1982 high, when it peaked at 9.4 percent.

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