P&O Ferries has fired 800 of its crew members with immediate effect on Thursday after stopping all its sailings earlier in the day.
The operator, owned by the Dubai-based DP World, said the business was no longer viable, and that it was looking to use cheap agency staff to operate its ships, and an agency to keep its ferries running, in a bid to shore up its finances.
"We have made a £100m ($131m) loss year-on-year, which has been covered by our parent DP World. This is not sustainable," the company said it a statement.
"Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries. These circumstances have resulted in a very difficult but necessary decision, which was only taken after seriously considering all the available options.
"As part of the process we are starting today, we are providing 800 seafarers with immediate severance notices and will be compensating them for this lack of advance notice with enhanced compensation packages."
Ferry services are also understood to be unlikely to restart for a number of days.
The business, which hires around 4,000 employees in total, said back in May 2020 that it may have to make 1,100 redundancies due to the coronavirus outbreak.
Although P&O benefited from furlough support during the pandemic, as well as a freight support grant, it failed to secure a £150m bail out from the UK government.
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The shock move has angered trade unions, who have advised crew members to stay on board the vessels. The officers union Nautilus said the news was "scandalous" and a "betrayal".
"The news that P&O Ferries is sacking the crew across its entire fleet is a betrayal of British workers. It is nothing short of scandalous given that this Dubai owned company received millions of pounds of British taxpayer's money during the pandemic." it said.
"There was no consultation and no notice given by P&O. Be assured the full resources of Nautilus International stand ready to act in defence of our members. We believe it is in our members' best interests to stay onboard until further notice."
— Karl Turner MP (@KarlTurnerMP) March 17, 2022
The RMT Trade Union likewise told its members on P&O Ferries’ boats to remain on board.
“We are deeply disturbed by growing speculation that the company is today planning to sack hundreds of UK seafarers and replace them with foreign labour,” RMT general secretary Mick Lynch said.
“We have instructed our members to remain onboard and are demanding our members across P&O’s UK operations are protected, and that the Secretary of State intervenes to save UK seafarers from the dole queue.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "The shock announcement of mass redundancies at P&O, as the company struggles with deep losses is another reminder of the devastation COVID has wreaked on the travel industry.
"The parent company Dubai based DP World has deep pockets but clearly is not willing to keep subsidising the loss making venture without fresh drastic cost-cutting.
"The nature of the redundancy announcement is unlikely to help it win back customers, with staff reportedly refusing to leave ship. This could fast turn into a severe reputational headache for the company, with a big union fight looming ahead.’’
Earlier in the day, P&O said it was pausing sailings, causing disruptions on a number of its routes. P&O operates four routes: Dover to Calais; Hull to Rotterdam; Liverpool to Dublin; and Cairnryan, Scotland to Larne, Northern Ireland.
The company’s vessels were asked to discharge their passengers and cargo, and standby for further instructions.
“To facilitate this announcement all our vessels have been asked to discharge their passengers and cargo and standby for further instructions,” P&O said.
“This means we’re expecting all our ports to experience serious disruption today so please bear with us and we will give further information in an all-colleague announcement later today.
“If you’re in a customer facing role further information will follow separately on how we would like you to work with our customers.”
#PODover 11:15 - Regretfully, P&O Ferries services are unable to run for the next few hours. Please arrive at the port as booked and we will arrange to get you away on an alternative carrier as quickly as possible. Once at the port please make your way to the DFDS check-in booths
— P&O Ferries Updates (@POferriesupdate) March 17, 2022
UK transport Secretary Grant Shapps expressed concern at the shock announcement, saying he is having “urgent discussions” with officials.
“I am concerned with this news which is breaking on P&O Ferries,” he said. “I’m working with the Kent Resilience Forum and I’ve just instructed them to become intricately involved and other partners in this, and we’ll be taking steps later today – including ensuring that my officials will be having urgent discussions with P&O about the situation, particularly of concern for their workers.”
Meanwhile Nicola Sturgeon, first Minister of Scotland, said the Scottish government will be seeking urgent talks over the job cuts.
Labour’s shadow transport secretary, Louise Haigh, also called on the government to respond, saying: “Unscrupulous employers cannot be given free rein to sack their workforce in secure jobs and replace with agency staff.
“The conservative government must not give the green light to this appalling practice, and must act to secure the livelihoods of these workers.”
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