Tunnel to cut 657 jobs

Eurotunnel yesterday announced it was cutting 657 jobs from its 3,500- strong workforce in a move that will reduce its running costs by pounds 32m a year.

Confirmation of the cutbacks came as Eurotunnel and Eurostar were given a freer hand in carving up the capacity of the Channel Tunnel, following a ruling by the European Court of First Instance.

The judgment means the three operators of Eurostar services - London and Continental Railways, SNCF and the Belgian rail company SNCB - will no longer have to reserve 25 per cent of their capacity through the tunnel for rival rail services.

The ruling overturns a European Commission requirement that Eurostar could only have exemption from anti-trust rules provided it kept the capacity available for other operators.

Eurotunnel meanwhile said that the job cuts would mainly affect consultants, sub-contractors and temporary staff. Of the 659 reductions, 306 will go in London and Folkestone and 351 jobs will be scrapped in Paris and Coquelles.

The company estimated that pounds 16m of the pounds 32m cost savings would come from a lower salary bill. The latest job cuts come on top of 200 staff reductions made since January this year.