A letter has emerged from the CEO of P&O explaining the company’s decision to lay off 800 people. The move is part of a plan to replace laid-off staff with interims, reducing the company’s personnel costs by 50%.
Boss Peter Hebblethwaite said the company was forced into the “difficult but necessary” decision after losing £100million year-on-year. The news was announced to staff today in a pre-recorded announcement that their contracts were ‘terminated immediately’.
This decision was condemned by the government as “totally unacceptable”. All sailings have been suspended by P&O Ferries as it revealed hundreds of jobs were to be lost.
In a statement on the matter, Transport Minister Robert Courts told the Commons: ‘They are dedicated and hardworking employees who have given years of service to P&O.’ The company had asked all ships to offload their passengers and crew, throwing customers’ travel plans into chaos and confusion.
P&O Ferries said it had given 800 seafarers immediate redundancy notices. He said: “Our survival depends on rapid and significant change.” Services are to be suspended for the next few days.
Mark Dickinson, general secretary of shipping union Nautilus International, said: ‘The news that P&O Ferries is laying off the crew of its entire UK fleet is a betrayal of UK workers.’
Here is his letter in full, as reported by MirrorOnline:
By now, I hope most of you have had the opportunity to hear directly from your leaders and managers about the changes we are making today to our crew model to reduce our crew costs by 50%, securing the future of our business and setting it up for growth.
I am reaching out to all of you directly today because it is important that we all individually understand the changes we have made to our business today and why we have made them.
Before I go into the details of the announcement, I want to start by thanking you for all you have done so far today to manage the disruptions to our customers, and all I know you will continue to do in the days to come. I know these few days will be difficult and your efforts are truly appreciated by me and the entire management team.
Why We’re Making Changes to Our Crew Model
As you know, at P&O Ferries we play a vital role in keeping trade moving, supply chains moving and connecting families and friends across the North and Irish Seas and the English Channel.
The English Channel is a major supply route carrying 59% of all UK trade with the European Union, 33% of this trade passing through the port of Dover alone. Alongside these freight movements, 35 million tourists also cross the Channel every year.
These supply routes require both maritime operations and the Channel Tunnel to balance competition, value and service for freight and tourism customers.
We have been at the heart of this service for years and our shareholder and management team are committed to serving these routes.
These changes we are talking about today are part of DP World’s wider plan to help P&O Ferries deliver the best to customers in the freight and tourism sectors. DP World is helping us invest in our future with new ships that will provide better service to all, totaling £250m.
However, in our current state, we are not a viable business. We made a loss of £100m year on year which was covered by our parent company DP World – it’s not sustainable.
Our survival depends on rapid and significant change now to protect the future of P&O Ferries and jobs across the business. These circumstances resulted in a very difficult but necessary and crucial decision, which was only taken after seriously considering all available options.
Without the changes we are making to our crew model today, there is no future for P&O Ferries.
What are the changes and the support available
Starting this morning, we are terminating the contracts of all 800 fellow sailors under contract with Jersey with immediate effect and will compensate them for the lack of notice with improved severance packages.
They receive support and are encouraged to access our employee assistance program if they feel they need it, now or in the days to come. As part of their package, they also receive career advice and support.
Today we entered into a new partnership with International Ferry Management (IFM) which is an international crewing company, and they will be responsible for providing new crews for all vessels affected by this change. Our new teams of fellow sailors have already joined our ships.
Our new crew are currently going through an intense familiarization process and training program on our ships, led by IFM. Only when this process has taken place will we gradually return to normal service in a safe way – adhering to our P&O standards and brand.
This new crew model will reduce our crew costs by 50% and allow us to be more competitive and better meet the needs of our customers. This is a proven model across the industry, while allowing us to maintain the levels of service and security that are at the heart of our operations.
As well as protecting our future and jobs across the business, we also ensure our customers have a resilient, sustainable and competitive business and ensure a quality service on key UK trade routes.
We already have a solid foundation in place – the best ships, on the best routes, under the best brand. Several weeks ago, we took the first step in our transformation by restructuring our business so that we are ready for growth. The second and most difficult step is the one we are taking today – which will make us the most competitive commercial operator in the industry.
By taking these steps, we are bringing together our years of heritage with the forward-thinking vision of our partner DP World, so that we can unlock the potential of our business for now and for the long term.
I appreciate that there is a lot to take in, and you may naturally be surprised by the suddenness of this news.
These changes are so significant that we were aware of the inevitable disruptions and uncertainties during any consultation period. In this context, we determined that it was best to act immediately.
We are currently notifying all directly affected colleagues, whether on ships or on leave.
We know some of you will have family or friends who are directly affected by this announcement, so rest assured that we are doing everything we can to support them at this time. If you are affected by this news, please take some time to process it.
Our Employee Assistance Program is also available 24 hours a day, 7 days a week, if you want to speak to someone in confidence, now or in the days to come. The phone number is available in the Q&A document, which is attached and is also available in the Quick Link section of Connections.
Please refrain from public comment and direct any external inquiries to our press office, details of which can be found in the Q&A document. It is also essential that we avoid posting comments or opinions on social media.
I want to speak to you directly this afternoon, so following this email, I will send you an invitation to join an All Hands call around 2 and 6 p.m. today. I will be talking about the same content on both, so join the call that works best for you and your working hours.
We have a Q&A sheet with answers to many questions we think you might be concerned about right now – please take a look here. If you have a question that is not covered in our Q&A sheet at this time, please submit your question here. We will then post an updated question and answer sheet tomorrow and I will also invite you to another All Hands call to go over your top 5 questions.
I look forward to speaking to as many of you as possible during the two All Hands calls scheduled later today.
CEO, P&O Ferries