It’s a contradiction that rarely makes headlines: While Mexico’s official employment numbers reach historic highs, the number of formal companies willing or able to create those jobs is quietly shrinking. In the last two years alone, 41,764 employer registrations vanished from the IMSS rolls, with 24,367 disappearing in 2025 — a decline not seen in decades. The numbers are more than a statistical quirk. They are a warning light for anyone invested in the country’s economic future.
For decades, the formal enterprise has been the engine of Mexico’s productive and social mobility. Each registered company is more than a tax ID. It’s a node in the country’s economic network, a source of learning, innovation, and, above all, employment. Yet, the latest data from IMSS reveals a stark reversal: While the number of formal jobs continues to climb, the base of formal employers is eroding. Micro and small businesses are the first to go — 56% of the closures in 2024-2025 were companies with just two to five employees, and another 29% had six to 10.
This is not simply a story of failed entrepreneurship or poor management. The context is more complex and systemic. Rising labor costs, regulatory friction, and persistent insecurity have made the environment inhospitable for those without scale or deep reserves. The IMSS itself acknowledges that part of the reduction is due to stricter security measures in registration, but this technical explanation only scratches the surface. The deeper question is whether the ecosystem is becoming less habitable for the very actors that have historically driven Mexico’s economic dynamism.
The Paradox of Growth Without Foundations
How can a country post record employment while losing the very companies that create those jobs? The answer lies in the structure of the labor market and the shifting nature of business formation. Large enterprises and government programs can absorb some of the workforce, but the disappearance of micro and small businesses signals a loss of diversity, resilience, and opportunity. It’s a trend that risks concentrating economic power and reducing the pathways for social mobility.
The paradox is uncomfortable: more employees, fewer employers. It’s a dynamic that can mask underlying fragility. If the base of job creators continues to shrink, the sustainability of employment growth comes into question. Are we measuring the health of the ecosystem, or just what’s easy to report?
The Unseen Costs of Doing Business
Behind the numbers are real-world pressures that weigh most heavily on the smallest players. Labor costs have risen sharply in recent years, driven by minimum wage hikes and new social security obligations. While these measures aim to improve worker welfare, they also increase the fixed costs for employers — costs that are easier to absorb for large corporations than for a family-run shop or a fledgling startup.
Regulatory complexity adds another layer of friction. From tax compliance to labor inspections, the administrative burden can be overwhelming for those without dedicated legal or accounting teams. Insecurity — both physical and legal — further erodes the willingness to take risks. For many, the calculation is simple: the environment no longer justifies the effort or the exposure.
The IMSS’s own technical adjustments, such as enhanced security in the opening of employer registrations, may have contributed to the decline, but they are not the root cause. They are, at best, a reflection of a system that is becoming more closed, more cautious, and less accessible to new entrants.
A Trend, Not a Blip
What makes this moment particularly concerning is the persistence of the trend. The loss of 41,764 employer registrations over two years is not an anomaly. It is the steepest drop in decades, and it shows no sign of reversing. According to INEGI’s business demography data, the mortality rate of micro and small enterprises has been rising since the pandemic, with only a fraction managing to reopen or reinvent themselves.
This is not just a cyclical downturn. It is the manifestation of structural pressures that have been building for years. The risk is that, by 2026, the country could find itself with a labor market that looks healthy on paper but is increasingly dependent on a shrinking pool of large employers and public sector jobs. The loss of entrepreneurial diversity is a loss of future potential — of the next generation of innovators, exporters, and community anchors.
Strategic Implications for Decision-Makers
For financial sector leaders, regulators, and investors, the implications are profound. A shrinking base of formal employers means a narrower pipeline for credit, innovation, and tax revenue. It also signals rising systemic risk: when fewer actors bear the weight of job creation, the system becomes more vulnerable to shocks.
Policymakers face a delicate balancing act. Efforts to improve worker protections and increase formalization are essential, but they must be calibrated to avoid suffocating the very businesses they aim to support. The challenge is not to choose between employment and entrepreneurship, but to recognize that one cannot thrive without the other.
For entrepreneurs and business owners, the message is equally clear. The environment is changing, and survival increasingly depends on the ability to adapt, scale, or collaborate. The days of going it alone are fading; networks, alliances, and digital transformation are no longer optional, they are existential.
The Uncomfortable Question
In 2026, Mexico stands at a crossroads. The celebration of record employment must be tempered by a sober assessment of the foundations beneath it. Without a vibrant, diverse, and growing base of formal enterprises, the promise of sustainable development will remain elusive.
The real question is not how many jobs are announced each month, but how many people are still willing — and able — to take on the responsibility of creating them. In the end, the health of the economy will be measured not by the number of employees, but by the resilience and vitality of those who dare to build something new.
The numbers are clear, but the story they tell is only beginning to unfold. As the country looks to the future, the challenge is not just to count jobs, but to count on the people and enterprises that make them possible. The next chapter will depend on whether Mexico can rebuild the foundations of its productive ecosystem or settle for growth without roots.