P&O Ferries has fired 800 employees as it is “not a viable business” in its current state.
The firm said it has suspended sailings “for the next few days”.
Workers currently onboard ships were instructed by unions not to leave.
Coaches carrying agency workers hired to replace them are parked near ships at ports.
Footage obtained by BBC South East shows the moment P&O Ferries staff were informed they had lost their jobs. pic.twitter.com/dvRnptHfC9
— BBC South East (@bbcsoutheast) March 17, 2022
There were reports that balaclava-clad security teams were sent on to ferries to remove the sacked staff.
Mark Dickinson, general secretary of maritime union Nautilus International, said: "The news that P&O Ferries is sacking the crew across its entire UK fleet is a betrayal of British workers.
"It is nothing short of scandalous given that this Dubai-owned company received millions of pounds of British taxpayers' money during the pandemic."
Many P&O seafarers were furloughed during the coronavirus crisis, with the British government paying up to 80% of their wages.
Britain's shadow transport secretary Louise Haigh said: "This scandalous action shows sheer contempt for the workforce.
"Unscrupulous employers cannot be given free rein to sack workers and replace them with agency staff."
P&O Ferries said in a statement: “In its current state, P&O Ferries is not a viable business.
“We have made a £100 million 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.”
It added that after “seriously considering all the available options” it has taken the “very difficult but necessary decision” to hand immediate severance notices to 800 seafarers.
Those fired will be compensated for the lack of notice with “enhanced compensation packages”.
P&O Ferries, which transports passengers and freight, is owned by Dubai-based logistics giant DP World.
It operates four routes: Dover to Calais; Hull to Rotterdam; Liverpool to Dublin; and Cairnryan to Larne.
Sailings between Hull and Zeebrugge, Belgium, were axed in January 2021.
Following the coronavirus outbreak, P&O Ferries warned in May 2020 that around 1,100 workers could lose their jobs as part of a plan to make the business “viable and sustainable”.
Sailings were halted this morning and will remain suspended "for the next few days", P&O Ferries told passengers.
British transport secretary Grant Shapps said his officials "will be having urgent discussions with P&O about the situation, particularly of concern for their workers".
P&O Ferries, which transports passengers and freight, operates four routes: Dover to Calais; Hull to Rotterdam; Liverpool to Dublin; and Cairnryan, Scotland, to Larne.
It has 2,200 employees remaining in the UK.
DP World was criticised for paying a £270 million dividend to shareholders at the end of April 2020 while P&O Ferries cut around 1,100 jobs as demand for travel collapsed due to the coronavirus pandemic.
P&O began operating ferries in the 1960s.
Cruise line P&O Cruises is unaffected by the developments as it is a separate business owned by Carnival UK.
