INDIANAPOLIS (Inside INdiana Business) — Illinois-based Durham School Services has detailed plans to lay off more than 500 employees in Indianapolis. In a notice to the state, the company says the layoffs are due to the loss of its contract to provide transportation services for Indianapolis Public Schools.

The district says 135 of its own employees will also be affected.

Last month, the IPS Board of Commissioners approved a new transportation contract with Cincinnati-based First Student Inc., which the board said would save the district $7 million annually. IPS plans to transition bus transportation from a shared system between the district and Durham to First Student, beginning July 1.

The majority of the Durham employees affected by the move include 218 drivers and 243 bus assistants. IPS employs 135 transportation employees, including drivers, attendants, and operations staff, who will also be laid off.

In an email to Inside INdiana Business, IPS Communications Manager Carrie Cline Black said, “We are working with First Student to ensure all successful employees who transport IPS students will get a job with First Student.”

IPS says it is working to finalize a retention bonus for all of its affected employees to stay on through the end of the school year. 

“The IPS Board of School Commissioners approved a contract with First Student Transportation that will improve the quality and reliability of transportation for our students and provide increased peace of mind for families,” the district said in a statement. “We value our employees and their loyal service and will work cooperatively with First Student to help all successful teammates find a new job within the company.”

Durham School Services has two physical locations in Indianapolis, which it says will be closed as a result of the contract loss.

First Student has not publicly stated whether it plans to hire the employees affected by the layoffs. Inside INdiana Business has reached out to First Student for comment.