The numbers are stark. Eight out of every ten companies in Panama have let workers go during the first half of 2026. That puts the country at the top of a grim regional ranking, far ahead of neighbors like Chile and Peru. The data comes from the Salaries and Hiring 2026 study, conducted by the employment platform Konzerta, which surveyed human resources specialists across five Latin American nations.
Panama’s 86% layoff rate towers over Chile’s 71%, Peru’s 68%, Ecuador’s 68%, and Argentina’s 67%. The figure also represents a ten-point jump from the same period in 2025, when 76% of firms reported dismissals. Only 14% of companies said they did not cut any staff during the first six months of this year.
What is driving this wave of job losses? According to the study, 46% of employers pointed to poor employee performance as the main reason. Cost reduction followed at 42%, while 19% cited the broader economic situation. Other factors included department closures (8%) and mergers or acquisitions (4%). Workers themselves feel the pressure. The same study found that 81% of employees said their company had conducted layoffs, and 19% reported losing their own job within the past year.
Miguel Bechara, director of Konzerta.com at Jobint, offered context for the findings.
‘The results show a labor market in contraction, with organizations prioritizing the stability of their structures. However, 41% of organizations plan to maintain their workforce and 19% plan to increase it. These data reflect a context in which hiring decisions are marked by caution and the need to sustain operations’ [Translated from Spanish]
The private sector data aligns with official government statistics. The National Institute of Statistics and Census (INEC), part of the Comptroller General’s office, reported that Panama’s unemployment rate climbed from 9.7% in October 2024 to 10.4% in September 2025. That translates to 227,302 people without work, an increase of 17,922 individuals year-over-year. Women have been hit harder, with their unemployment rate rising from 12.4% to 13.2%, compared to men whose rate increased from 7.7% to 8.1%.
Employment did grow slightly during that period. The number of employed people rose from 1.94 million to 1.96 million, an increase of 27,547 workers or 1.4%. The services sector drove this growth, accounting for 70.3% of national employment. But that expansion was not enough to absorb the growing economically active population, which pushed the unemployment rate higher.
Panama’s economy continues to show signs of life. The country’s GDP grew by 4.8% in 2025, making it one of the most dynamic economies in Latin America. Yet that growth has not translated into broad-based job creation. The disconnect between macroeconomic performance and the real experience of workers and businesses raises questions about where the benefits of growth are actually flowing. For context on the broader regional picture, Latin American employment trends show that many countries in the region face similar challenges, though Panama’s current situation stands out.
The outlook for the rest of 2026 remains cautious. The Konzerta study found that 41% of organizations plan to keep their current headcount, while another 41% expect to reduce staff further. Only 18% anticipate hiring new workers. On salaries, the picture is equally restrained. A full 83% of companies said they have no plans to increase wages for the remainder of the year, and just 17% expect to offer raises. Among workers, 75% reported receiving no salary increase during the first half of 2026.
ManpowerGroup Panama’s latest Employment Expectations Survey offers a similar forecast for the third quarter of 2026. Between July and September, 21% of employers plan to shrink their workforce, 32% expect to hire, and 45% anticipate no changes. Another 2% remain uncertain. This suggests a moderately active labor market, but one where caution dominates.
Labor Minister Jackeline Muñoz has acknowledged the challenges. She recently stated that after focusing programs on young workers, the next priority will be helping people aged 42 to 56 reenter the workforce. This demographic, she said, faces particular difficulty finding new jobs. Initiatives like Mi Primer Empleo (My First Job) and internship programs will continue targeting youth, while new efforts aim to expand opportunities for older workers. Understanding the Panama labor market requires looking at these demographic pressures alongside the broader economic trends.
The Konzerta study gathered responses from 5,008 workers and human resources specialists across Argentina, Chile, Ecuador, Panama, and Peru. Panama’s position at the top of the layoff list is a warning sign. Even as the economy grows, companies are cutting jobs, freezing hiring, and holding the line on wages. For the thousands of Panamanians already out of work, and for those worried about their current position, the second half of 2026 does not promise much relief.
The disconnect between GDP growth and employment raises deeper questions. If one of Latin America’s fastest-growing economies cannot generate enough stable jobs, what does that mean for the region as a whole? For now, Panamanian workers and businesses are navigating a landscape where caution has become the default strategy. The Arauz Anthropological Museum Panama may be looking for a new logo, but the labor market is looking for something far more fundamental: a path back to stability.