Cross-Channel bookings are down

The job cuts form part of a strategy to take one of the eight P&O ferries on the Calais-Dover route out of service by next year.

The move comes in response to the tourism industry downturn and growing competition from no-frills airlines.

P&O said the exercise would cut profits by �15m this year, but would deliver a similar sum in annual savings.

"We regret having to announce these cost cutting proposals, but we believe they are essential if we are to address the present difficulties, " said P&O managing director Russ Peters.

Bookings slump

He said the firm had been hit by "a continuation of the disappointing trends in our tourist business that we identified earlier in the year."

Last week, P&O reported a decline in cross channel bookings during the key summer season.

The decrease in summer bookings came on top of a slump during the first six months of the year which pushed P&O's ferry business to a first half loss of �17.5m.

P&O hopes a new high-speed catamaran service between Portsmouth and Caen in Normandy, which will reduce the crossing time by up to five hours, will help combat the downturn.

P&O's ferry operation, which serves routes between the UK, Ireland, and the European mainland, accounts for about a fifth of the company's overall business.