Stagecoach to axe 650 jobs!

[whole diary]

[ReWind]

I havn't been able to find out much info yet, but I have found out that Stagecoach, which runs SWT^▸ (South West Trains), are to axe 650 jobs from the SWT area of their business.  This is due to a fall in the number of passengers using this service to London Waterloo. 

Once I find out more, I will post in moree detail!!

If anyone else can find out more information, that would be much appreciated!!

[Btline]

A fall!

I suppose it must be the lost jobs in the City (plus the sky high fares and overcrowding on the Waterloo and City line).

A big shame, as it may scupper hopes for new platforms in the old Eurostar terminal).

[Chris from Nailsea]

Stagecoach, the bus and rail group, has reported strong six month profits but warned of challenging conditions to come and said it would be cutting jobs.

The group said bus operations would be protected from the economic downturn.  But it said it would be carrying out a cost reduction programme in its rail businesses that would include job cuts.

Stagecoach runs the South Western and East Midlands train franchises and owns 49% of Virgin Trains, which operates the West Coast mainline.

But the statement predicted a sharp downturn in employment, especially in central London and warned that it would hit demand for its rail services. South Western, for example, is particularly reliant on commuters.

"As a result, we are taking action now to ensure that our UK^▸ (United Kingdom) rail businesses remain competitive," said chairman Robert Speirs. "Our plan includes a cost reduction programme in our rail operations, which will include headcount reductions."

See http://news.bbc.co.uk/1/hi/business/7762173.stm

[John R]

The problem is that all the franchises have their subsidy/premium profile based on a fairly aggressive increase in revenue (and thus number of passengers).

So let's say in 2008 passenger volumes and revenues are flat against 2007 (which was 5% up over 2006), and there is a 5% reduction in 2009. Now this may only take the situation back to roughly the 2006 volumes, but in terms of the subsidy/premium expected, this would have expected 2009 revenue to be around 15% higher (all figures exclude for the moment inflation.)

So even if in 2009 the railway is still carrying the numbers of passengers it did in 2006, it can't afford to, because the franchises will be losing vast amounts of money. Hence the need for paring costs in any way they can. It's a fundamental flaw in the way the franchises were let, in that they assumed that the good times would always continue.

It will be very interesting to see how the government reacts to this. Paring costs is likely to be hugely damaging to both the railway with passenger volumes still historically high. (Anyone remember how the busmen who first ran SWT^▸ (South West Trains) screwed up post privitisation by thinking they could slash the workforce?)

But the only alternative is for the government to renegotiate the franchise terms. If they don't then there is a real risk that some of the franchise holders will hand in the keys, rather than lose money hand over fist. Though of course if you hand in one franchise you hand in the lot, so there will be a lot of hard thinking.  I bet the bids for the new South Central franchise are going to be much more conservative though.       

[eightf48544]

I thought the whole point of a franchise was that the farnchisee ran all the risks. So that if they can't meet their committments then they go bust and their shareholders suffer.

It is dead easy for BR^▸ (British Rail(ways)) to pick up the franchise run it like South Eastern. If several went bust at once then you have the makings of a new BR.

After all the EU^» (European Union - about) directive only requires the cost of infrastructure and train running to be accounted for separately. Look at France their infrastructure company equivalent to Networkrail contracts all the work to SNCF^▸ (Societe Nationale des Chemins de fer Francais - French National Railways).

[Henry]

 Heard that FGW^▸ (First Great Western) are also looking to axe jobs.

 Apparently front line staff from all parts of the region, mainly ticket office/platform staff.

[G.Uard]

One of the platform staff at a major junction on the GWML^▸ (Great Western Main Line) told me that platform staff are being axed at his particular station.  That said, FGW^▸ (First Great Western) have used trained agency staff on gateline duties.

I note that all former agency gateline staff are being brought in house.  (Source  Current RMT^▸ (National Union of Rail, Maritime & Transport Workers) Magazine).

(Edited to include gateline update.)

[Super Guard]

There are lots of OTT^▸ (Open Train Times website) rumours about job losses going around.  I was told that people were likely to be 'moved around' rather than lose their jobs.  I was also told about some of the changes, but at this stage it would be wrong I feel to discuss this here.

As usual though 'Brother Bob' and his Union bandwagon will be ready for action 

[Btline]

Hang on... I thought FGW^▸ (First Great Western) were hiring more staff to cope with shortages!