Labour’s general secretary Jennie Formby has written to all Labour party staffers to reassure them that they will keep their jobs until the end of the year, with decisions about staffing to be made next week. Labour’s loss of seats means that it will lose some of the money it receives through Short money – the public funding made available to opposition parties to assist them with scrutinising the government in Parliament – which will have major implications for the party’s staffing levels and finances over the course of the parliament.

Short money is calculated using a combination of votes and seats, leaving Labour on course to be £1.2m worse off over the course of the next parliament.

Formby will meet with the political officers of the affiliated trades unions – generally the key day-to-day liaison between the trades unions and the general secretary – to discuss the shortfall. But the conversations are expected to include what one trade union official described as “tough and frank” discussions about the party’s future direction and leadership.

Although the letter is designed to reassure staff as much as possible, aides are well aware that it in practice is a warning that job cuts are coming. The political costs of defeat are already evident. Now Labour officials will face the personal ones, too.

The full letter is below.