Grasping Amazon’s Dominance in Costa Rica

Amazon’s history in business has been one of utter dominance wherever it goes. Whether in the US, Europe, APAC or Latin America, the consequences of Amazon’s arrival run deep in every market it has set foot on, transforming not only the face of retail, but also technological capabilities, logistical channels and the overall labor landscape.

In the case of Costa Rica, Amazon stands as one of the most dominant forces in the labor market for BPO. In less than two decades, the company has grown its Costa Rican headcount from less than 100 to tens of thousands. 

“I’m surprised Costa Rica hasn’t been renamed ‘Amazon’ with how many agents they have there.”

Costa Rican investment officials hold Amazon as one of their favorite success stories. Its permanence and rapid expansion signals that the country can offer great value even to one of the top companies in the world. If Amazon is more than satisfied with its Costa Rican operations, why wouldn’t other global companies jump at the chance of moving in too?

For BPO providers, Amazon’s presence in Costa Rica can be a double-edged sword, however. On the one hand, a client of Amazon’s size and profile presents tremendous opportunities for business. On the other, such hunger for talent complicates a labor landscape which some already characterize as “saturated.”

Renaming Costa Rica

“I’m surprised Costa Rica hasn’t been renamed ‘Amazon’ with how many agents they have there,” said a nearshore BPO executive who has been operating in the region for years and who asked to remain anonymous.

The comment might come off as an exaggeration, made in pure jest, but there’s some truth to it. 

Industry sources estimate that Costa Rica has somewhere between 30,000 and 35,000 people employed in the BPO industry, with approximately 150 firms working in the country. 

Back in 2022, Amazon employed 17,000 people in Costa Rica, according to data from CINDE, the country’s investment promotion agency. CINDE does not specify how many of those 17,000 did BPO work for Amazon, but BPO-related jobs are the most prevalent in the company’s job portal for Costa Rica.

👩🏾‍💻 Today, @amazon $AMZN announced the creation of 2,000 job openings. These positions will include specialist roles in areas such as customer service, technology, cloud services, finance and accounting.

📰 Read more » https://t.co/UF4QPpTCN4 pic.twitter.com/DUQT9kmwE7

— CINDE | Invest in Costa Rica (@invest_cr) June 26, 2019

Such massive employment numbers didn’t come overnight for Amazon, but the company’s expansion has been relatively quick.

Amazon landed in Costa Rica back in 2008 and hired 75 people specifically for its CX operations. From that point on, the retail giant has been growing at a very fast pace. 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. According to Amazon’s own data, between 2017 and 2021, its number of collaborators in Costa Rica had practically tripled: from 5,000 to 15,000.

In 2023, the company laid off 18,000 workers globally. There are no official numbers on how many of those employees were located in Costa Rica, but industry sources estimate that, as of today, Amazon’s Costa Rican headcount remains somewhere near 15,000.

Too much Amazon?

It is said that Costa Rica has perhaps grown too popular in the BPO industry for its own good. The country is regarded as one of Latin America’s main hubs for global services delivery, for shared services centers and for traditional BPO operations. All that popularity, however, has also made Costa Rica one of the most expensive options for delivery in the whole region. 

Though not the only major player in the country, Amazon’s huge presence has contributed considerably to the perception of Costa Rica’s main cities –San Jose and Heredia, specifically– as sites where one has to pay a premium only to secure a place to operate in. 

“Costa Rica offers many amazing benefits to companies who want to outsource there,” commented a top BPO executive, who asked to remain nameless. “Based on the numbers it seems like Amazon controls a large percentage of the BPO workforce and is the big fish in Costa Rica.”

Costa Rica is far from Amazon’s top priority in Latin America. Mexico and Brazil remain as the company’s main sites of operations in Latin America, a fact that can be glimpsed by the job openings available in each territory. Mexico tops the list with 422, currently; Brazil follows with 262; and Costa Rica is third with 117.

But even those numbers speak of Costa Rica’s relevance for Amazon’s regional operations. Costa Rica is a small country, with a population barely above 5 million. Economically, it doesn’t even crack the region’s top ten largest economies. Brazil and Mexico are largest and second largest countries in Latin America & the Caribbean both demographically and economically.

Even so, in the eyes of Amazon, Costa Rica ranks above regional powerhouses such as Colombia and Argentina, at least when it comes to the sourcing of talent. 

And there’s a chance Costa Rica might upgrade its profile for international businesses. Since last year, US authorities have coordinated with the Costa Rican government to develop the country’s workforce and technological capabilities. The aim is to incorporate it into the regional semiconductors supply chain.

In other words: Costa Rica could be on the brink of a radical makeover.