This paper investigates the determinants of job losses due to the COVID-19 pandemic in small island developing states of the Caribbean. Utilising a survey of 1,979 firms in the Caribbean and a Probit regression model, the study identifies the key factors that might lead a firm to retrench staff. Two of the most important factors that impacted on job losses were the ease of doing business and innovation. Investing in the ease of doing business within the Caribbean therefore seems to be not only an economic good, but a social benefit as well. The findings of the study also support the use of innovation as a response to crises.