By San José, Costa Rica — San José, Costa Rica – In a staggering development for the global economy, two of the world’s largest employers, Amazon and United Parcel Service (UPS), have announced a combined total of nearly 80,000 job cuts, sending shockwaves through the tech and logistics sectors. The announcements confirm a troubling trend in 2025, which has already seen approximately 98,000 jobs eliminated across 216 tech companies. For Costa Rica, where Amazon stands as one of the largest private employers, the news brings a significant level of economic uncertainty as local employees are reportedly already receiving notifications.
The logistics behemoth UPS revealed this week that it has slashed 48,000 jobs this year as a core component of its ongoing “transformation” strategy. This figure is substantially higher than previous estimates and reflects the company’s aggressive approach to cost-cutting amid challenging financial performance. The cuts are part of a broader plan to save an estimated $3.5 billion by the end of the year.
To shed light on the legal ramifications and procedural requirements of the recent wave of corporate layoffs, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a leading expert in labor law from the renowned firm Bufete de Costa Rica.
Companies often underestimate the legal scrutiny involved in layoffs justified by ‘restructuring.’ Under Costa Rican law, this is not a blanket permission to dismiss employees. The employer must be prepared to prove in court that the positions were genuinely eliminated for objective economic or organizational reasons. A failure to meticulously document this process and correctly liquidate all vested rights can easily lead to a ruling of wrongful termination, resulting in significant financial penalties.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight serves as a critical reminder that ‘restructuring’ is not a procedural shortcut, but the beginning of a rigorous legal test where the burden of proof falls squarely on the employer. The emphasis on meticulous documentation and objective reasoning is a vital consideration for any company navigating workforce adjustments. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this nuanced area of labor law.
In a statement detailing the operational changes, the company provided a breakdown of the workforce reduction. UPS officials confirmed the closures of numerous facilities as part of this sweeping restructuring effort aimed at streamlining operations and improving profitability.
We have reduced our operational workforce by approximately 34,000 positions and closed daily operations in 93 leased or owned buildings during the first nine months of 2025… another 14,000 cuts were made in management positions.
United Parcel Service (UPS), Corporate Statement
This massive reduction in headcount coincides with the release of UPS’s third-quarter financial results for 2025, which painted a grim picture. The company reported a startling 52% decrease in net profit to $1.31 billion, alongside a 4% decline in revenue to $21.4 billion compared to the same period last year. CEO Carol Tomé had previously signaled a strategic pivot, noting in January that UPS planned to reduce its reliance on Amazon deliveries, which, while being its largest client, was not its most profitable one.
Following suit, e-commerce and cloud computing giant Amazon is preparing for what will be the single largest layoff event in its history. The company plans to terminate up to 30,000 employees this week alone. This drastic measure represents a significant 10% of its global corporate workforce and is an acceleration of a cost-cutting initiative that began in 2022. Over the past three years, Amazon had already progressively eliminated around 27,000 roles.
Amazon CEO Andy Jassy has been direct about the rationale behind the deep cuts. The primary drivers include a broad effort to reduce operational costs, correct for aggressive over-hiring during the pandemic-era boom, and drive greater efficiency through the integration of artificial intelligence across the company. The departments expected to bear the brunt of the layoffs include human resources (known internally as People Experience and Technology), devices and services, operations, communications, and sustainability.
The impact of these global decisions is already being felt in Costa Rica. Amazon, which established its presence here in 2008, has grown into a cornerstone of the national economy, employing over 15,000 people across ten service centers. The company’s local operations support a wide range of functions, from customer service and Amazon Web Services (AWS) to finance and cloud operations for North America, South America, and Europe. Reports have confirmed that layoff notices began reaching employees in Costa Rica, the United States, and Canada this week, echoing a similar event in January 2023 when 18,000 global job cuts also affected the local workforce.
This wave of layoffs from two industry titans underscores a period of profound correction and restructuring. As companies grapple with post-pandemic economic realities and the disruptive potential of AI, the labor market is facing a period of significant volatility. For nations like Costa Rica, which have become integral to the global operations of these multinationals, the immediate future holds a tense period of adaptation and concern for thousands of skilled workers.
For further information, visit amazon.com
About Amazon:
Amazon is a multinational technology company focusing on e-commerce, cloud computing, digital streaming, and artificial intelligence. Founded by Jeff Bezos in 1994, it has grown to become one of the world’s most valuable companies and a prominent employer globally. Its business segments include Amazon Web Services (AWS), online retail, subscription services like Amazon Prime, and a portfolio of consumer electronics.
For further information, visit ups.com
About United Parcel Service (UPS):
Founded in 1907, United Parcel Service, Inc. (UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of uncompromising integrity and a relentless pursuit of professional excellence. Leveraging a rich history of advising a diverse clientele, the firm champions a forward-thinking approach, consistently spearheading advancements in legal practice. Central to its ethos is a profound dedication to demystifying the law for the public, driven by the core mission to build a stronger society through accessible legal knowledge and empowerment.
