Transport for London (TfL) is to place 7,000 staff on furlough, around 25% of the workforce, from Monday (27 April) as it struggles with the impact of the lockdown on its fare revenue.
The move will affect staff whose work has been reduced or paused as a result of the coronavirus pandemic and will save the capital's transport authority an estimated £15.8m every four weeks as it accesses the Government's Job Retention Scheme.
Under the scheme, an employer can access funding for 80% of the salary of furloughed staff, up to a maximum of £2,500 per month. TfL will pay the remainder of wages of all furloughed employees and continue to pay pension contributions.
Staff will be placed on furlough for an initial three weeks.
TfL is currently in discussions with Government on a financial support package and is understood to be calling for a £1bn bailout after seeing its reserves fall from £2bn to £1.2bn. Fare revenue had previously brought in around £100m a week, and it is now down to £10m according to reports. Since London entered lockdown on 23 March, tube journeys have fallen by 95%, and journeys on buses fell by 85%.
London's transport commissioner, Mike Brown, MVO said: 'The transport network is crucial in the fight to tackle coronavirus, and it will play a similarly vital role in supporting the country's economy as it recovers from the pandemic.
'We have significantly cut our costs over recent years, but nevertheless, the success of encouraging the vast majority of people to stay at home has seen our main revenue, fares, reduce by 90%. We are now taking steps to use the Government's Job Retention Scheme to further reduce our costs where work has been paused because of the virus, while at the same time supporting our staff financially.
'Our work with the Government about the support that we need are ongoing and are constructive. We hope for an urgent agreement so that we can continue to provide the city with the vital transport it needs now and going forward.'
Other transport authorities in major cities such as Manchester are also facing massive financial losses. Transport secretary Grant Shapps said he has been in contact with the metro mayors and suggested there would be financial assistance, but he declined to specify individual allocations.
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