Tallink Grupp justified its decision by saying long-term charter contracts for the Isabelle and Star ferries and ending.

The company said that the ships are currently leased without crews and that it will not be able to employ so many workers in the future.

Seven of Tallink's 15 ships are contracted out and six are abroad in Canada, the Netherlands and Scotland. Several of them, including the Isabelle, were used as short-term accommodation for Ukrainian refugees.

In Estonia, ship service personnel will be most affected, while in Latvia, service and technical personnel will be laid off.

Tallink Grupp said 400 redundancies would be made from Hansaliin OÜ, which will mostly affect Estonian staff, and 100 from Tallink Latvija.

The exact number of redundancies has not yet been finalized but the collective redundancy process will start this week and will be completed by autumn.

Redundancies have also been made at HT Laevatenindus, another smaller subsidiary of Tallink Grupp.

Tallink Grupp Chairmain Paavo Nõgene said the company has tried to offer crew members jobs on other vessels.

"[But] Following the summer high season, we will sadly not be able to offer as many jobs as before to all our colleagues," he said in a statement.

Nõgene added that over the last few years the company has done everything in its power to keep as many jobs as possible despite the crises and to guarantee the survival of the business.

The Estonian Unemployment Insurance Fund (EUIF) told ERR Hansaliin OÜ submitted an initial collective layoff notice for 407 people. The company employs 1,263 people in total.

Reasons given include the long-term and ongoing effect of the coronavirus pandemic, which has reduced passenger numbers, the effect of the Russia-Ukraine war on the economy, and a reduction in the number of sailing vessels on Baltic Sea routes. This has limited the company's ability to provide work for employees, it said.

EUIF communications advisor Lauri Kool said the final number of redundancies could be lower. He said, for example, when Hansaliin OÜ attempted to lay off 1,000 people during the pandemic, the final number was 745.

Most of these former workers initially registered as unemployed, but now they are no longer registered, he said.

Jüri Lember, chairman of the board of the Estonian Seamen's Independent Union, told ERR the trade union does not have many possibilities to prevent layoffs. However, he also reiterated he the final number may be smaller.

Lember said that the trade union now has two weeks for consultation sessions. 

"We will ask the employer additional questions and try to negotiate with them," he said.

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