KRAKÓW, POLAND — Bloomberg reports that recent developments in Poland’s labor market indicate rapid growth in artificial intelligence (AI) and automation, putting pressure on the country’s booming outsourcing sector.
Kraków, Poland, was once considered the country’s hub for the business services industry, driving the highest salaries in Poland. Kraków has attracted the most foreign investment in business process outsourcing, accounting for a fifth of them—a contribution that made up nearly 6% of Poland’s GDP.
However, many of these jobs are not under threat of being replaced by AI. This, combined with wage increases, is leading to a crack in Poland’s economy.
Layoffs Hit Kraków as Businesses Favor AI and Automation
By October, 32 companies across BPO, data processing, tax consultancy, and similar fields in Kraków had notified authorities with their plans to lay off 4,195 staff. This is a 70% sharp increase over last year.
Key developments include:
- Core roles are being replaced by process automation and AI systems to streamline routine operations.
- Companies like Shell, Heineken, and HSBC are shifting their operations to cheaper locations in India or Asia.
Poland is no longer an up-and-coming economy competing with cheap labor. The recently announced plans for mass layoffs in these companies certainly pose a significant challenge for Kraków. It will be difficult to maintain the same course. This requires transformation and change.
— Andrzej Kubisiak, Polish Economic Institute Deputy Director
This Development’s Implications for Poland
For years, the outsourcing industry has strongly contributed to Poland’s GDP. This AI-driven job displacement is forcing the country to reconsider its market strategy.
Kraków is an attractive place for investors, it is prepared for economic changes and has the resources to build an innovative economy based on high technologies.
— Deputy Mayor Stanislaw Mazur
This signals the need for up-skilling in the country’s employment space.
As AI reshapes businesses by eliminating routine roles, workers may feel the need to shift toward high-skilled, specialized jobs. Without proactivity toward this, they may struggle to adapt, further risking long-term unemployment.
