Yahoo Finance Coronavirus: 1,100 job cuts at P&O Ferries spark anger over taxpayer cash and dividends
P&O Ferries has announced around 1,100 of its workers in the UK and Ireland face redundancy, as it slashes costs in a bid to stay afloat during the coronavirus pandemic.
The Dover-based company, which carried millions of passengers and freight units every year across Europe before the virus hit, has suspended its passenger operations as demand has collapsed.
The decision sparked a backlash from unions and Labour, with anger over the firm receiving government cash and announcing dividend payments in March while slashing jobs.
Around 1,100 staff had already been furloughed before the latest announcement of job cuts, receiving 80% of their pay through the government-funded job protection scheme.
The company is also currently in negotiations with the UK, French and Irish governments over a deal to support struggling freight operators to maintain vital supplies. P&O Ferries is reported to have previously requested but not received a £150m ($185m) bailout from the British government.
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Meanwhile its board announced a $332m dividend in early March. “What is utterly shameful is P&O have been kept afloat by our members and the taxpayer whilst their owners have been paying out hundreds of millions in dividends in Dubai,” said Mick Cash, general secretary of the RMT union, which represents seafarers.
He called the job losses an “appalling betrayal” of the workforce who had maintained key supply lines during the pandemic. He said the union feared the jobs would not return to the UK, and British seafarers would be replaced with much lower-paid workers from overseas.
But a source told Yahoo Finance UK the dividend payment had been agreed before COVID-19 hit, and was unavoidable as part of a deal with shareholders over the de-listing of the company.
Around 20% of P&O Ferries is owned by investors on the Nasdaq Dubai stock exchange, with the majority owned by the government of Dubai. It announced the return to private ownership earlier this year, blaming the “short term thinking of equity markets.”
P&O Ferries has warned the pandemic is one of the toughest peacetime challenges in its 180-year history. Before the crisis hit, its ships made around 27,000 journeys a year between Britain, France, Northern Ireland, Ireland, Holland and Belgium.
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A spokesperson for P&O Ferries told Yahoo Finance UK: "Since the beginning of the crisis, P&O Ferries has been working with its stakeholders to address the impact of the loss of the passenger business.
“It is now clear that right-sizing the business is necessary to create a viable and sustainable P&O Ferries to get through COVID-19.
“Regrettably, therefore, due to the reduced number of vessels we are operating and the ongoing downturn in business we are beginning consultation proceedings with a proposal to make around 1,100 of our colleagues redundant.”
Labour’s shadow maritime minister Mike Kane also said the decision was “disappointing” given the dividend payments in Dubai and furlough payments from the UK government.
“Any further taxpayer support must be contingent on protecting UK jobs and these lifeline routes.”
He added: “This is a real blow to British seafarers and there is now a real fear that these jobs will never return to Dover or Hull.”
