The firm say that the shock decision is necessary to keep the company viable, however, Transport Secretary Grant Shapps has said he is “concerned” about the situation, and a statement on P&O is expected at 5pm today.
It is thought that the Dubai-owned company are aiming to replace the workers with labour through an agency.
In Hull, members of two unions are believed to be holding a sit in on the Pride of Hull ship, which makes regular trips between the Yorkshire port and Rotterdam in the Netherlands.
The Yorkshire Post has been told that staff have lifted the gangway and locks have been removed, preventing anybody else getting on board.
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.
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”.
Grant Shapps tweeted earlier today: “I am very concerned about the news from P&O Ferries this morning and we will be speaking to the company today to understand the impact on workers and passengers.
“Important to note other operators continue to run cross Channel routes, so passengers and goods can flow, but I am working with the Kent Resilience Forum to minimise disruption.”
Hull East MP Karl Turner called the actions “disgusting”.
He told The Yorkshire Post: “This is predatory capitalism”.
He added “They're owned in Dubai, they’ve had £10million from the British taxpayer just in furlough money during the pandemic.
“Subsequent to that they've had millions of pounds in grant on top, and they’re treating British taxpayers and British workers with utter contempt”.
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.
“There was no consultation and no notice given by P&O.
“Be assured the full resources of Nautilus International stand ready to act in defence of our members.
“We believe it is in our members’ best interests to stay onboard until further notice.”
Chair of the Transport Select Committee of MPs Huw Merriman said: “The developing story that P&O may terminate the employment of hundreds of crew members to replace them with overseas labour is deeply concerning.
"The Government must do everything it can to ensure that this appalling employment transaction cannot be completed. Concern remains as to whether this is lawful. Firing loyal staff and replacing them with cheaper labour sourced from elsewhere is not a model that the public will wear.
"That model was not acceptable when our national flag carrier airline attempted to adopt it, and it is not acceptable now. The Government should make it clear that it will not condone this behaviour.
"P&O’s parent company, DP World, must understand that British customers won’t do business with companies that treat their staff with contempt.”