PKP Company Starts Group Layoffs. Every Third Employee Will Lose His Job

Problems of the railway giant.  Every third employee on parking

The PKP Cargo board has passed a resolution that gives the green light to dismiss up to one in three employees. Consultations on group layoffs are beginning. The second largest company of this type in Europe has very serious financial problems.

The collective layoffs would cover up to 30 percent of the company’s workforce, i.e. up to 4,142 employees in various professional groups, and would take place no earlier than the day following the date of notification to the district labor offices until September 30, 2024, the carrier informed.

Group layoffs at PKP Cargo

Employees affected by mass layoffs are entitled to a severance payment based on their period of employment. The estimated amount of the provision related to employment restructuring and information on the impact of employment restructuring on financial results will be determined after the consultations are completed.

A few months ago, the disastrous financial situation of the company specializing in freight transport came to light. The number of orders for transport is falling: according to data from the Office of Rail Transport, PKP Cargo’s share in the market of transported goods in terms of weight fell after March this year to 28.7 percent of the entire market, compared to 33.9 percent a year ago, and in terms of transport work performed, it decreased to 29.4 percent after March from less than 37 percent a year earlier.

New management criticizes predecessors

Costs are rising (energy), and the company has invested large amounts of money in marketing. The new president of the company announced on May 13 that in order to finalize the budget, the company is withdrawing, with immediate effect, from sponsorship agreements with several sports clubs.

“In some cases, it was caused by private, politically motivated interests of the then members of the PKP Cargo management board, who were unfortunately primarily politicians of the then ruling political party, and not managers caring for the good of the PKP Cargo company. Moreover, some of these agreements included personal benefits for people associated with PKP Cargo, e.g. in the form of sponsoring the trip and stay of such a person at the Olympic Games in Paris in the summer of 2024,” the company explained.

– We must state clearly that as a result of the irresponsible actions of our predecessors and their political principals, PKP Cargo has found itself in a difficult situation, which requires us to make, among others, such unpopular decisions as terminating sponsorship agreements with clubs and sports organizations – said Monika Starecka, member of the board for finance.

At the end of December 2023, PKP Cargo had almost PLN 4.6 billion in liabilities.

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