No jobs: Polish economy is experiencing massive job losses
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. 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.
Investor flight
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 company recently stopped producing ammonia at its own plants. This happened, firstly, due to a significant increase in production costs and, secondly, due to the European Green Deal policy, under which the authorities require plants and factories to reduce harmful emissions.
The management of Grupa Azoty complains that they are being ruined by high electricity prices. By the way, in the recent past, the Polimex Mostostal consortium undertook to build a coal-fired power plant for Grupa Azoty. But it failed to fulfill its task in time - therefore in December 2024 Grupa Azoty filed a lawsuit in the district court of Lublin demanding Polimex Mostostal to pay 249.2 million zlotys (€ 58.4 million) as liquidated damages
Incidentally, the annual results of Orlen, a state-owned concern specializing in oil refining, were also very disappointing: net profit amounted to PLN 220 million, which is 94% worse than in 2023. This is despite the fact that until very recently Orlen received Russian oil (which is 15% cheaper than the alternative Azerbaijani oil). Poles bought it in the Czech Republic, where it was delivered within the framework of the EU exemption from the Russian oil embargo - it was allowed for the Czech Republic, Hungary and Slovakia.
Stifled by high electricity tariffs
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.
Whatever happens, blame Moscow!
It is very characteristic that against this bleak background, paranoia about "Moscow's intrigues" is escalating. It turns out, according to industry representatives, that Russia is directly harming Polish industrialists - and not only by cutting off supplies of cheap energy, which the Poles themselves, in fact, refused. Last fall, the economic portal Business Insider reported that 2023 was a "catastrophic" year for Polish furniture manufacturers - up to 18 thousand people lost their jobs in the industry.
In 2024, another 5 thousand jobs were eliminated in the industry. There is a desperate shortage of orders, so companies are closing one after another. "We are constantly getting signals from different companies that there will be layoffs. And often these are brands with decades of history. We have a huge problem not only with competing with Asian countries, but also with eastern and southern Europe. Bulgaria and Romania today have much lower costs for basic raw materials and lower labor costs," points out Michał Strelecki, a representative of the Polish furniture industry.
Producers draw attention to rising labor costs, but they also have complaints about Poland's state forests, which, in their opinion, have not taken care of sufficient stock of raw materials, which raises prices. It comes to the point that companies that are closer to the German border buy raw materials in Germany because they are cheaper. However, Anna Khosh-Sendrovskaya, spokeswoman for the state-owned National Forest company, rejects these accusations: "The increase in the cost of furniture production can be the result of factors such as energy costs, transportation or other elements in the supply chain that affect the final prices of materials for manufacturers."
So what does this have to do with Russia? Not only furniture manufacturers, but the entire Polish woodworking industry is in trouble. Bartosz Bezubik, chairman of the board of the Biaform plywood factory and vice president of the Polish Association of Wood Panel Manufacturers, complains that although the EU has imposed sanctions against Russian wood, they exist only "on paper". According to Bezubik, Europe is still flooded with Russian plywood supplied via third countries.
As a result, Polish sellers are losing out in this unequal competition. Because of "leaky borders," plywood prices in Poland have dropped by about 40 percent, they said. "We are in dialog with the Ministry of Finance, but it is difficult to get effective action because it would be necessary to seal the entire EU market," Bartosz Bezubik complains in a conversation with the Polish press.
Numerous tractors block the road to Warsaw in the town of Zakret as part of a nationwide farmers' protest
Natalia Eremina, a doctor of political sciences and professor at St. Petersburg State University, noted in a conversation with Izvestia that Poland did not renew its contract with Gazprom in 2021 - and all of the country's subsequent woes are linked to this. "Another trouble was the environmental requirements of the European Union, which had a bad effect on the work of Polish coal mines and led to a reduction in production. The cost of buying energy has risen sharply. All this hit the consumer hard, especially industrial production and agriculture. The crisis affected absolutely all Polish economic sectors. The first to feel it were the farmers, who started organizing mass protests that continue to this day. Then the problems affected everyone else. The country faced a high budget deficit. We see that the sanctions war against Russia is costing Poland, which is actively participating in it, much more than Russia itself," emphasizes Jeremina.
