All P&O Ferries sailing staff are understood to have been made redundant with immediate effect, it has been reported.
It's claimed the operator, which runs services between Cairnryan in Dumfries and Galloway and Larne in Northern Ireland, will use an agency to keep ferries running.
Current workers will be able to apply to the agency for work, according to ITV news.
It comes after all P&O Ferry services were cancelled on Thursday morning and motorists were turned away from ports.
Company chiefs told the Record: "P&O Ferries is not going into liquidation. We have asked all ships to come alongside, in preparation for a company announcement.
"Until then, services from P&O will not be running and we are advising travellers of alternative arrangements.”.
STUC General Secretary Roz Foyer said:“This is a damning, outrageous move from P&O and we offer our full support to the RMT Union and all their members.
“We cannot – and will not - permit hundreds of workers to be sacked on the spot to be replaced by cheaper labour whilst P&O scramble to remain viable.
“We need to see an urgent statement from both the UK Government and the Scottish Government on how they intend to halt this scandalous misuse of employer power."
A spokesperson for P&O Ferries said: “P&O Ferries plays a critical role in keeping trade flowing, supply chains moving, and connecting families and friends across the North and Irish seas and the English Channel.
"We have been at the heart of this service for years and we are committed to serving these vital routes.
"However, in its current state, P&O Ferries is not a viable business. We have made a £100m loss year on year, which has been covered by our parent DP World. This is not sustainable.
"Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries.
"These circumstances have resulted in a very difficult but necessary decision, which was only taken after seriously considering all the available options.
"As part of the process we are starting today, we are providing 800 seafarers with immediate severance notices and will be compensating them for this lack of advance notice with enhanced compensation packages.
"In making this tough decision, we are securing the future viability of our business which employs an additional 2,200 people and supports billions in trade in and out of the UK.
"And we are ensuring that we can continue serving our customers in a way that they have demanded from us for many years.”
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