The number of formal businesses or employers in the country declined for the second consecutive year in 2025 due to factors such as economic uncertainty, lack of investment, labor reforms that have increased costs for businesses, and insecurity, according to experts.
At the end of the year, there were just over 1,029,000 employers registered with the Mexican Social Security Institute (IMSS) in the country, representing a 2.4 percent contraction compared to 2024, or 25,667 fewer.
In 2024, the number of people generating jobs also decreased, by 1.6 percent year-on-year, equivalent to 17,911 fewer employers.
With this result, the loss of employers registered with the IMSS accelerated during Claudia Sheinbaum’s first year in office.
An analysis by the Center for Economic Studies of the Private Sector (CEESP) highlighted the ongoing complexity in Mexico of registering new employers and maintaining the activity of existing ones, significantly impacting the possibility of expanding formal payrolls.
“While it is true that the most recent IMSS (Mexican Social Security Institute) results show a modest improvement in the number of registered workers in the last month of the year, this does not offer an optimistic scenario, especially given the significant decrease in the number of employers, who are responsible for generating jobs,” the organization stated.
The CEESP emphasized that, according to IMSS data, formal employment continued to show signs of weakening at the end of the year.
Oscar Ocampo, Director of Economic Development at the Mexican Institute for Competitiveness (IMCO), noted that the majority of these employers who deregistered from the IMSS, approximately 83 percent, have fewer than five employees; that is, they are micro or small businesses.
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“This speaks to how expensive it is to be an entrepreneur in Mexico (…) In this country, it is very difficult for micro and small businesses to do business,” the specialist pointed out.
According to Ocampo, the drop in the country’s economic growth levels, low investment levels, as well as the increase in the minimum wage and the increase in vacation days, among other legal changes, have impacted business costs, especially for small businesses.
To this, the specialist added the issue of extortion, which, according to the federal government itself, is the only crime that has not been reduced, and it has an impact on businesses in the country.
Data from the National Alliance of Small Businesses (ANPEC) indicates that half of the businesses in the country have been victims of some type of crime, with extortion being the most prominent, representing a quarter of the monthly profits for small businesses.
Beatriz Robles, Director of Operations at Manpower, highlighted that IMSS data shows the most significant loss of employers observed in the country since 1997.
The specialist agreed on the factors that have led to the contraction in formal businesses, among which she emphasized the decline in investment, which, she noted, is the main driver of the formal economy in the country.
The most recent data from INEGI indicates that last October, gross fixed investment in Mexico fell at an annual rate of 5.8 percent, marking 14 consecutive months of negative growth.
Regarding the increase in the minimum wage, which this year was 13 percent, the executive considered that while it is positive for workers and for the country, these types of measures must be accompanied by incentives for businesses to prevent them, especially micro and small businesses, from moving into the informal sector.
The specialist emphasized that informality, which stood at 54.8 percent of the economically active population at the end of November, grew more than formal employment. She pointed out that the latter was driven by the regularization of workers on digital platforms.
“Of the 278,000 formal jobs created in the country, practically 206,000 were for people who were already working in these types of arrangements,” she noted.
Source: oem
