Travel firm set to cut 2,500 UK jobs

Travel firm Thomas Cook says it is to cut 2,500 UK jobs and close 195 stores in Britain as the euro crisis, high fuel costs and unrest in destinations like Egypt and Greece take their toll on the holiday business.

Most of the job losses would be in its retail network and back-office positions and would involve the closure of 195 of its 1,069 UK stores, said the world’s oldest travel group, which has a workforce of 15,500 in UK and Ireland.

The 172-year-old group has struggled over the last two years with a slump in sales that has forced it to renegotiate bank loans and sell off planes and stores to lighten its debt load.

Thomas Cook said jobs at its head offices at Peterborough in eastern England and Preston in the northwest were at risk, while its Accrington office, also in the northwest, would be shut. It will also change terms and conditions of some employees.

“We firmly believe these proposals will mean a better, more profitable, Thomas Cook that continues to be a major employer in the UK,” said the group’s UK and Ireland chief executive Peter Fankhauser in a statement.

“Thomas Cook needs to make the proposed changes to secure our future,” he said.

Travel firms and airlines across Europe have seen bookings fall over the last two years, hit by the euro zone debt crisis, high fuel costs and social and political turmoil in popular holiday destinations such as Greece, Egypt and Tunisia.

Thomas Cook has been hit particularly hard by tough trading conditions in Britain where its core customer base of families with young children has been affected by the economic downturn.

Since Harriet Green took over as CEO last May, the company has seen a steady improvement in finances following disposals to slash its €1.77bn debt pile, including the sale of its Indian business and several Spanish hotels.

“We were well aware of the challenges that Thomas Cook have been facing in turning their UK business around, but the scale and severity of these redundancies come as a real shock,” said Sharon Ainsworth of the Usdaw shopworkers’ union.

Usdaw said Thomas Cook planned to replace store managers with cluster bosses, while also removing a layer of management at larger branches.

This week Thomas Cook said it had decided not to sell its under-performing French business and would instead kick off a restructuring programme to turn the unit around.

Thomas Cook last month reported reduced Q1 operating losses and said its turnaround plan was on track.

— Reuters