"If It's Not for Staff, It's Not for Football," PKP CARGO Cuts Expenses with a Sharp Pencil

Panic at PKP CARGO. To combat a huge operating loss, it is not only laying off staff, but it is also drastically withdrawing financial support for the football club and the Polish Olympic Committee. How will this Polish freight rail giant survive?

Earlier, RAILTARGET reported on PKP CARGO's financial problems. The company's interim management is trying to eliminate the operating loss of PLN 118 million for the first quarter of this year by all means. 30% of employees will be put on "hindrance to work" as of July 1.

But that is not all. The company is also drastically reducing its social engagement. RAILTARGET has found out that it has also terminated its sponsorship of the Widzew Łódź first division football club, effective immediately on 10 May 2024. The club, which is only tenth in the Polish PKO BP Extraliga table and is not performing very well, has to come to terms with this decision in the middle of a drawn-out competition.

Others with whom PKP CARGO immediately terminated contracts are the Polish Olympic Committee and the lower league club Unia Skierniewice. The company's decision is motivated not only by the financial situation but also by an audit of sponsorship contracts which, according to the new interim management, are not sufficiently justified. In the case of the Olympic Committee, they also contain an unacceptable benefit for persons associated with PKP CARGO in the form of financing a trip to the Olympic Games in Paris.

PKP CARGO has justified its position on the grounds that at a time when there is no money to pay employees, no other action can be taken. Moreover, the advertising for football clubs served the personal political promotion of members of the previous PKP CARGO management. The former CEO, Seliga, was a member of parliament for the now-opposition Law and Justice party for the Piotrków Trybunalski constituency in the Łódź Voivodeship.

Of course, the multi-million savings in sponsorship will not solve the company's basic problem, which is the loss of market share. In an interview with Obserwatorlogistyczny on 14 May, Marcin Wojewódka, the authorized chairman of PKP CARGO's board of directors, said that the company is currently in the process of identifying the mechanisms that led to the Polish national rail freight carrier losing more of the market than it objectively should. "Our competitors are more agile, faster, better responding to customers' needs, while PKP CARGO behaved like a big ship that lost its rudder, but the people on the captain's bridge were mainly pursuing their own particular interests and did not see the fog they were in. They were convinced that things would always work out," he said verbatim.