Eurotunnel set to cut 600 jobs

Eurotunnel will announce more than 600 job losses tomorrow as part of a cost-cutting drive aimed at streamlining its operations.

The job cuts, equivalent to a fifth of the total workforce, will mainly fall on part-time and consultancy staff employed on fixed-term contracts to help with the build-up of Le Shuttle services.

Georges Christian Chazot, managing director of operations, told French trade unions of the cuts last Friday and the plans will be put formally to Eurotunnel's works council tomorrow.

A total of 657 jobs are expected to go from the 3,000 on Eurotunnel's payroll. A spokeswoman would not confirm details of how the job losses would be split between Britain and France, but she stressed that most of the employees affected would be those on short-term contracts.

Wherever possible, permanent Eurotunnel staff would be redeployed elsewhere, she said.

The job losses are likely to be phased in over the next 12 to 14 months and will be achieved partly by non-renewal of fixed-term contracts.

The shake-up follows a management overhaul at Eurotunnel last week in which Mr Chazot took direct charge of operations and Bill Dix switched to become managing director of Le Shuttle.

During the build-up phase of services Eurotunnel has employed large numbers of contract staff on tasks such as re-engineering the shuttle trains.

But with Le Shuttle and Eurostar services now fully operational and Eurotunnel having captured nearly half the cross-Channel market, the aim is to devote more effort to customer service.

Eurotunnel is also positioning itself to take on the merged ferry service announced earlier this month by P&O and Stena. Details of the new pricing and marketing strategy of the merged service are expected between now and Christmas.

Meanwhile, Eurotunnel does not expect to be able to issue shareholders with documentation on its financial reconstruction until some time next year.