US tech outsourcing saps talent from Latin America’s startups

Startups across Latin America are struggling to attract and retain tech workers as US outsourcing creates a shortage, Rest of the World’s Jimena Ledgard, Sandra Pérez, and Florencia Pagola report. US tech firms’ search for cheap programming talent accelerated during the pandemic and continues as market conditions force firms to cut costs.

US tech layoffs aren’t easing the pressure either, with 69% of employers across the region reporting IT talent shortages in 2022. This has forced Latin American startups to become creative and competitive in training junior programmers while poaching more senior talent.

The labor shortage is a serious challenge for the region’s startups which have seen record levels of VC investment over the past few years. For firms in smaller markets like Uruguay and Peru, the pressures are immense, however in other parts of the region, alternative compensation like equity grants are becoming less taboo.

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