Krakow layoffs reflect broader shift to AI, automation in CEE

The city of Krakow, south Poland, saw nearly 1,900 group layoffs in the first quarter of 2025, almost equalling the total for all of 2024, local media reported, citing official data.

The dismissals, mostly affecting white-collar roles in finance, technology and business services, point to deeper structural changes in the Central and Eastern Europe (CEE) business services model; one increasingly shaped by automation, AI and global consolidation.

From 1 January to 31 March 2025, 1,877 workers in Krakow, population 790,000, were affected by group layoffs, compared with 1,961 throughout 2024, according to the provincial labour office. Analysts say these developments mark a new phase in Krakow’s post-industrial trajectory.

Analysts say these developments mark a new phase in Krakow’s post-industrial trajectory. While the city remains a key services hub in CEE, its reliance on foreign employers makes it vulnerable to global restructuring cycles. The rise of AI and ongoing margin pressures are expected to deepen these structural trends.

Krakow’s outsourcing model under strain

The surge in layoffs highlights mounting pressure on Krakow’s white-collar job market, long reliant on international outsourcing and business process services. Redundancies are being driven by a convergence of automation, economic pressure and strategic consolidation.

As global firms consolidate operations and adopt new technologies, roles once seen as stable are being phased out or relocated. Firms are accelerating the use of AI and automation to streamline operations, particularly in repetitive administrative functions. In parallel, global cost pressures are prompting companies to reassess their staffing footprints, often consolidating or relocating processes to lower-cost hubs within their networks.

Banks realigning strategies, locations

HSBC Service Delivery confirmed the axing of 189 employees, citing cost optimisation and long-term strategy changes. Despite the cuts, the firm is still recruiting for over 200 highly specialised roles in cybersecurity and compliance. Other companies in data processing, research, accounting and software development announced mass redundancies, with some of the cuts in the hundreds.

UK bank NatWest announced in June 2024 the closure of its Polish operations, resulting in approximately 1,600 job losses by the end of 2025 as part of a strategy to consolidate financial crime operations into UK and India hubs.

Last February, automotive technology company Aptiv dismissed around 200 employees in Krakow. The resulting Polish state labour inspectorate probe found only minor procedural shortcomings, state news agency PAP wrote.

A regional trend, not an isolated case

Similar trends have been reported elsewhere in CEE. In Cluj-Napoca, west Romania, multinational insurers have begun automating claims processing functions. In Budapest, a major telco cut 8% of back-office roles after adopting a new AI-based customer resolution system. Analysts say such cases suggest that automation is no longer a speculative threat; it is actively reshaping CEE’s service economy.

What comes next

Krakow’s current adjustment may be a bellwether for other CEE cities reliant on the same outsourcing logic. The question now is not whether more job cuts are coming, but how prepared the region is to adapt to the forces already reshaping its economic foundations.

Poland’s labour ministry announced in March that it would expand AI and data training subsidies for regional workers. But observers caution that such efforts must accelerate significantly to keep pace with the speed of disruption.

Industry analysts warn that without targeted reskilling and tech-sector diversification, cities like Krakow may struggle to maintain their competitive edge. “CEE needs to pivot fast: from being a cost-saving destination to being a value-creating one,” one regional strategist said.