Polish rail freight operator PKP Cargo is cutting its workforce to reduce spending and close its budgetary gap. In order to save jobs, the company has made agreements with other PKP subsidiaries and Polregio. Now, infrastructure manager PKP PLK will take over 250 employees.
On Monday 15 July, the two companies signed a letter of intent indicating that PKP PLK will take over the 250 employees from PKP Cargo. Earlier, the freight operator signed letters of intent with PKP Intercity, PKP Intercity Remtrak and Polregio for the transfer of a thousand employees in total.
“All actions that we undertake as the management board of PKP Cargo are aimed at providing real help to our employees. This is the fourth letter of intent that we have signed with another railway company, thanks to which over 1,000 employees can continue their work”, board member Paul Miłek commented.
Financial trouble at PKP Cargo
When the current management board took over at PKP Cargo earlier this year, it was quick to announce measures to improve the company’s finances. According to the board, their predecessors’ mismanagement led to the current need for radical steps to save the company. In May, the new board explained that the company had a budgetary gap of 1,17 billion euros.
Initially, it announced that a third of all employees would be ordered not to work and be paid 40 per cent less during their inactive period. Later, PKP Cargo announced that it would have to lay off those employees instead and conduct a restructuring procedure.
Temporary board to stay on longer
Moreover, the current supervisory board announced that it will stay on longer. It says that continuity is necessary in the company’s ongoing crisis situation. As a result, the supervisory board will now stay on until 25 October.