New Orleans Lays Off 3,000 Workers

Around 3,000 city workers in New Orleans are to lose their jobs in the aftermath of Hurricane Katrina, it was announced yesterday.

The mayor, Ray Nagin, said he had been forced to cut the jobs because of the damage the hurricane has done to city finances.

Mr Nagin - who announced the laying off of around half the 6,000 public workforce "with great sadness" - insisted only non-essential posts would go. He said no firefighters or police would lose their jobs.

Describing the layoffs as "pretty permanent", he said New Orleans would work with the Federal Emergency Management Agency (Fema) to notify municipal employees who had fled the devastated city.

The job losses will begin to take effect this week, and final pay packets will be sent out later in the month.

"I wish I didn't have to do this," Mr Nagin said. "I wish we had the money, the resources to keep these people. The problem we have is we have no revenue streams."

He said city officials had spoken to banks and other financial institutions, but could not find a way of keeping staffing levels where they had been before the storm hit.

There had been no suggestion of job losses in New Orleans before the hurricane battered the Gulf Coast in late August.

Mr Nagin said the job cuts would save between £2.5m and £5.5m of the city's monthly £11.3m payroll.

Meanwhile, BP yesterday revealed that hurricanes Katrina and Rita would blow a $700m (£400m) hole in its third-quarter profits, knocking it off course from its annual production targets.

The New York Times also reported that one of the main banks in New Orleans, Liberty Bank & Trust, was struggling to cope in the aftermath of the Katrina. The report said the bank's customer base had scattered, and money seemed only to flow out.

Emergency workers in Louisiana yesterday ended their door to door search for bodies with the state death toll standing at 972 - far fewer than the 10,000 officials had feared at one stage. The death toll in Mississippi was 221.

A company hired by Louisiana to remove bodies will remain on call in case any others are found.

The former US president Bill Clinton yesterday met dozens of evacuees from the New Orleans area who were staying at a shelter in the Rivercenter convention complex in Baton Rouge, the Louisiana state capital.

Mr Clinton, working with fellow former president George Bush to raise money for victims, chatted with the evacuees, some of whom had been living in the convention centre for more than a month.

Many complained of a lack of showers, clean clothes, privacy and medical care. "My concern is to listen to you ... and learn the best way to spend this money we've got," Mr Clinton said.

Robert Warner, of New Orleans, said he and others had struggled to get private housing set up through Fema. "We've been mired in the bureaucratic red tape since day one," the 51-year-old said.

Later, Mr Clinton was driven through the heavily-damaged lower Ninth Ward of New Orleans, where many homes had collapsed or been pushed off their foundations. "I saw things I'd never thought I'd see," he said before holding a meeting with residents of the largely untouched Algiers area.

He told people at an Algiers high school that state officials were committed to creating a comprehensive plan to help Louisiana residents, saying: "We've got a much better chance of giving people a fair shake in the long term than we did in the short term."