Polish economy is experiencing massive job losses – the country is close to economic disaster

Numerous tractors block the road to Warsaw in the town of Zakret as part of a nationwide farmers' protest.
Photo: Global Look Press

The year 2025 promises to bring a continuation of a period of significant job losses in the Polish economy. A number of large companies have announced their intention to carry out large-scale layoffs – tens of thousands of people may lose their jobs, ‘Isvestia’ newspaper notes.

However, this is nothing new – last year was just as bad. Polish industry is being ruined by the high cost of energy resources. In the current situation, when Poland, like other EU countries, is assiduously breaking its former economic ties with Russia, there is no solution to the problem of expensive energy resources and is not expected. Read more in Izvestia's article.

Polish press is sounding the alarm – foreign investors have started to leave the country. Information about mass layoffs of employees by foreign companies in Poland began to appear regularly, starting from the spring of 2024. The data of the Polish State Statistics Agency show a total dismissal of more than 16 thousand employees from 175 companies in the spring-summer of last year. Thus, at the beginning of August, the European logistics giant PKP Cargo announced the impending layoff of 4 thousand employees of its Polish branch. Meanwhile, the Polish branch of PKP Cargo is the largest rail freight carrier in the country and the second largest in the EU. In the end, the "restructuring" initiated there reduced the number of employees of this company by 30%.

The American clothing and footwear manufacturer Levi Strauss warned of the liquidation of its plant in Płock (which had been operating for over thirty years) and the dismissal of all its 800 employees. The French company Michelin decided to close its truck tire production in Olsztyn. The Swiss concern ABB announced the closure of its low-voltage motor plant in Alexandruw-Ludzki and the layoff of 400 workers. The same concern announced the dismissal of 600 workers from its plant in Kłodzko.

The transnational automobile manufacturing corporation Stellantis is closing its engine production in Bielsko-Biala and laying off about 500 people. Swedish auto giant Volvo Buses closes production in Wrocław and lays off more than 400 employees. The American company Lear Corporation, which produces car seats and automotive electrical systems, is liquidating its Pikutkowo facility and will lay off 960 people.

Public sector enterprises feel no better than private business. Of the twenty-four companies under the control of the Polish state, thirteen have recorded financial losses. For example, Grupa Azoty, the leading fertilizer producer in the EU, ended with a loss for the ninth consecutive quarter.

The management of Grupa Azoty complains that they are being ruined by high electricity prices.

The beginning of the new year 2025 brought another dose of bad news. Thus, the largest staff reduction is planned by the Polish Post (Poczta Polska), where up to 10 thousand people may lose their jobs. Serious layoffs await those working in the household appliance industry. Beko Europe is closing its plants in Lodz, which means that 1,100 people will lose their jobs. Another 700 workers will be laid off from a refrigerator manufacturing plant in Wroclaw. Polish home appliance manufacturer Amica also announced 49 job cuts.

Industrial group Alchemia (Boryszew Capital Group) wants to lay off 250 people to start with. In the automotive sector, alarming signals come from the Polish subsidiary of the already mentioned Lear Corporation, which plans to lay off a total of 608 employees from its Wroclaw plant. The layoffs will be carried out in stages until March and – will cover both production and office positions. The Polish subsidiary of the American automotive company Shiloh Industry is also planning layoffs.

Layoffs are also expected in the energy sector: Grupa Azoty will lay off about 200 people. Polish manufacturer of equipment for the energy sector Rafako has declared bankruptcy and will lay off 699 employees by February 28. This decision, as announced, stems directly from "the need to liquidate the company". According to Polish media, Rafako failed to reach an agreement with key creditors regarding the conversion of debt into shares - which deprived it of chances to obtain external financing and fulfill future orders.

Several factors of irresistible force are ruining Polish companies. "The most frequent causes of layoffs are rising costs of both labor and energy. But also among the main factors are inflation, shifting production to countries with lower labor costs and the development of artificial intelligence," notes Polish political scientist Kristina Ismagilova. Chief among these challenges at the moment is energy. "Poland has one of the highest wholesale electricity tariffs in the EU, which is mainly due to our dependence on coal," notes Polish energy expert Robert Tomaszewski.

Most Western companies leaving Poland are moving production to other Eastern European countries, North African and Asian states. Manufacturers justify that they are forced to do so because of the predicted continued rise in electricity, gas and heat prices. "The problems of Polish industry are growing. Polish entrepreneurs are competing with foreign companies that have access to much cheaper energy," lamented Agnieszka Zielinska, a journalist for money.pl. She spoke to Henrik Kalisz, head of the Polish Chamber of Industrial Energy and Energy Consumers, who complained that "we have less and less time to change this situation".

Last July, Poland's Forum of Electricity and Gas Consumers (FOEEiG), which unites the country's largest industrial fuel and energy consumers, sent a panicked letter to Prime Minister Donald Tusk. The message cited the risks to industry from high electricity prices. "This letter was a kind of expression of desperation. We wanted to alarm the Prime Minister about the situation in industry, which is becoming more and more serious and is projected onto the economy as a whole, which is sinking into recession," emphasizes Kalisz.

The situation would be even worse if the country did not have a temporary freeze on electricity prices – it was recently extended to 2025. The cost of electricity is kept at the current level of 500 zlotys (over 12,000 rubles) per megawatt-hour, which is lower than the market tariff of 623 zlotys. "This measure, according to preliminary data, will cost the Polish budget 6 billion zlotys in the form of additional reimbursement needed for energy suppliers to compensate for the price caps - in addition to the 2 billion zlotys already allocated for consumer protection," Ismagilova notes. By the way, it is worth recalling that at the same time Poland spends astronomical sums on weapons, making it a NATO leader in military spending.

…There are two main problems with the Polish economy. Firstly, it is subsidized – it lives on money that it receives from the European Union, and over the last twenty years this amount has been about 160 billion euros. Secondly, Poland currently spends huge amounts of money on military expenditures instead of strengthening the economy. The result is a possible collapse.

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