Western Union Is Winding Down Its Costa Rica Operations Centre Over Twelve Months
COSTA RICA · BUSINESS
Key Facts
- —The decision Western Union will gradually reduce the presence of its Costa Rica operations centre over the next twelve months.
- —The timing Most of the transition is expected to conclude by mid-2027.
- —The destination Some operations move to Guatemala. Others remain in Costa Rica.
- —The reason The company cites a comprehensive review of its operating model.
- —The catch No job figure has been disclosed. The widely quoted 1,000-plus is a 2011-2013 headcount, not a cut.
- —The commitment Severance under applicable law and employee support were promised.
A widely circulated figure of more than a thousand jobs comes from headcount data a decade old. The company itself has given no number at all.
Western Union is closing down most of what it does in Costa Rica. The company told El Financiero it will gradually reduce its operations centre over the next twelve months.
It has not said how many people are affected. That absence is the most quoted part of the story and the least examined.
Its formulation was that after a comprehensive review of its operating model, it is reducing the centre’s presence. Director Ben Hawksworth acknowledged the change will affect many Costa Rican teams.
The Number Nobody Has
A figure of more than a thousand jobs has circulated widely. It does not come from Western Union.
It traces to data published by CINDE, Costa Rica’s investment promotion agency, covering 2011 to 2013. In that period the centre employed more than a thousand people.
That is a headcount from over a decade ago, not a measure of the current cut. Using it as the size of the redundancy is a common error and a significant one.
The company declined to confirm a number of affected positions. Until it does, the scale of this is unknown.
What Is Actually Happening
The wind-down runs over twelve months. Most of the transition is expected to conclude by mid-2027.
Some operations move to Guatemala. Others remain in Costa Rica, though the company has not specified which.
Severance will be paid under applicable law, and employee support was promised. Costa Rican labour law provides for notice and severance based on length of service.
A gradual wind-down with a stated end date is the least disruptive way to close an operations centre. It is also the version that leaks slowly rather than arriving as a shock.
Why This Matters to Costa Rica
Costa Rica built a services export sector on exactly this kind of operation. Multinational back offices, shared service centres and contact centres employ tens of thousands of people.
The pitch was an educated, bilingual workforce in a stable country on North American time zones. It worked for two decades.
The pitch now has a cost problem. Costa Rican wages have risen, and the colón is at its strongest level since the exchange-rate series began in 2007.
A company paying salaries in colones and earning revenue in dollars watches that number closely. Every record in the exchange rate raises the dollar cost of a Costa Rican employee.
That some work moves to Guatemala rather than to another continent is the tell. This is a regional cost decision, not an offshoring one.
What a Services Economy Depends On
Costa Rica hosts an operations centre or back office for a long list of multinationals. The sector is concentrated in free zones around San José.
Those firms are mobile by design. An operations centre is people, software and a building, none of which is tied to a location.
That mobility was the country’s advantage when it was winning the work. It is the same mobility that makes departures fast when the arithmetic changes.
Guatemala, Honduras and El Salvador have all been building competing operations. They are cheaper and they are on the same time zones.
The Wider Pattern
Back-office work is also the category most exposed to automation. Payments processing, reconciliation and customer support are the functions where software has advanced fastest.
Western Union has not cited automation and there is no basis for asserting it. A comprehensive review of an operating model can mean many things.
What is observable is the direction. Costa Rica has been moving up the value chain into medical devices and advanced manufacturing for a reason.
Those sectors are harder to relocate on a cost decision. They are also smaller employers per dollar invested than a contact centre.
More: Costa Rica news in English, every day from The Rio Times.
Frequently Asked Questions
How many jobs are affected?
Western Union has not disclosed a figure. The widely quoted figure of more than a thousand comes from CINDE headcount data for 2011 to 2013.
When does this happen?
The wind-down runs over twelve months, with most of the transition expected to conclude by mid-2027.
Where does the work go?
Some operations move to Guatemala. The company says others remain in Costa Rica, without specifying which.
Why is Costa Rica losing this work?
Wages have risen and the colón is at its strongest level since 2007, raising the dollar cost of a Costa Rican employee. Guatemala competes on cost.
Sources: El Financiero Costa Rica.
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