Ferry operator Irish Continental is cutting 150 jobs on its struggling routes to France.

Staff were informed yesterday that the company will, from next year, crew ferries on the Rosslare-Cherbourg and Rosslare-Roscoff with agency staff rather than employees.

Irish Continental has seen a 7 per cent fall in car traffic on its French routes so far this year and sources close to the company said yesterday's announcement was "designed to save the service".

"Those routes have been facing difficulties for a while and are clearly under threat," the source said. "There's no way a company could suffer such a decline in numbers for any length of time."

The company acknowledged that it was struggling in the face of increased competition from ferry rivals and low-fares airlines.

Irish Continental, which employs 1,200 people, is drawing up a voluntary severance deal that will be offered to staff on both the Ireland-France routes and its Irish Sea services. Staff on the French routes who decide to stay with the company will transfer to the Irish Sea routes.

A spokesman for Irish Continental last night said it hoped to complete the redundancy programme by the end of November when the French services shut down for the winter.

The company is also closing its office in Dublin's Merrion Row and transferring the call centre operation to other existing premises.

That decision comes amid a decline in the amount of walk-in business for the line. Online bookings have become the largest single source of sales with much of the rest coming through travel agents.

The spokesman said the moves were designed to cut costs across the group and followed a restructuring of manning levels on the company's Irish Sea routes earlier this year.

"We are showing our commitment to this service but it must be at a cost structure that works and allows us to offer fares that are low enough to attract the business we need."