Workers in Poland’s Małopolska region are losing jobs due to artificial intelligence, prompting Kraków city officials to develop a strategic action plan.
Job Losses Accelerate in Małopolska
Employees in the Małopolska region are experiencing job losses attributed to the increasing implementation of artificial intelligence within local service centers. In 2024, employers announced 3042 redundancies, a figure that rose to 5430 by the following year.
Data through February of this year indicated 809 job reductions, increasing to nearly 1,300 by the end of the first quarter. The trend is accelerating, driven by AI’s growing role in the region’s service sector.
Simple Roles Most Vulnerable
Krzysztof Inglot, President of Personnel Service, explains that AI is primarily replacing simpler tasks, reducing the need for lower-level IT professionals. He attributes this to years of focusing on basic assembly and service companies, where automation diminishes employment opportunities.
Kraków’s Economic Transformation
Kraków city officials maintain that the situation is not an economic downturn, but a deep transformation of the economic model, accelerated by automation, AI development, and global business process optimization.
Kraków remains Poland’s largest business services center and a key hub in Central and Eastern Europe, employing approximately 108,000 people in over 300 service centers and 60,000 IT specialists. However, the nature of these jobs is changing.
The shift is away from simple, repetitive processes towards more advanced skills in areas like IT, data analysis, cybersecurity, AI, and research and development. Automation limits quantitative employment growth but increases productivity and wages, according to Jolanta Tęcza-Ćwierz of the Kraków City Hall’s communication office.
City’s Plan for Mitigation
City officials acknowledge there are no administrative tools to halt global technological and restructuring processes. However, they emphasize the importance of actively managing the change to mitigate its social impact and strengthen the city’s competitive advantages.
The city is fostering ongoing dialogue with businesses through industry organizations and direct meetings to monitor the situation and respond quickly to changes. The Kraków Entrepreneurship Council is being finalized, and a platform for city-business collaboration is being created to develop solutions for the labor market and investment.
Focus on High-Value Investment and Skills Development
The city is also implementing a new investor service system, strengthening collaboration with private partners and focusing on high value-added projects, particularly in AI, deep tech, and the space sector. Active attraction of investment is also a priority.
The city is engaging with international partners and working to secure strategic projects, including those related to the European Space Agency. It is also developing the innovation ecosystem by strengthening the startup environment, collaborating with the Kraków Technology Park and industry organizations.
Reskilling and Upskilling Initiatives
Developing competencies is seen as a key response to technological changes. The city has implemented local priorities of the National Training Fund, focused on reskilling and upskilling workers at risk of redundancy. The Kraków Labor Office provides advisory, training, and outplacement services, and collaboration with companies is being expanded to better match skills with market needs.
Despite the increasing number of announced redundancies, Kraków’s unemployment rate remains low at 2.6%, with many workers finding new employment relatively quickly, often in more advanced roles. The city’s actions are strategic and long-term, aiming to transition from a “cheap service location” model to a competency-based metropolis founded on knowledge, technology, and innovation.
Embracing Transformation
Jolanta Tęcza-Ćwierz concludes that the key is not to stop the transformation, but to consciously utilize it to strengthen Kraków’s position as a major technology hub in the region.