THOMAS Cook is to cut 2,500 jobs and close 195 of its high street travel agencies as part of its continuing efforts to turn its troubled UK business around.
The 172-year-old travel firm has battled over the last two years with a slump in sales and a string of profit warnings that has forced it to renegotiate bank loans and sell off assets to lighten its debt load.
The company, which has 1,069 stores and employs 15,500 staff in the UK and Ireland, said yesterday most of the job losses would be back-office positions and within its retail network.
Jobs at its head offices at Peterborough in eastern England and Preston in the northwest are also at risk, while its Accrington office, also in the northwest, would be shut. It also plans to change the terms and conditions of some employees.
Peter Fankhauser, Thomas Cook's Europe and UK chief executive, said making cuts was “never easy” but said it owed it to customers to make sure its administrative costs were “as low as possible”. “We firmly believe these proposals will mean a better, more profitable, Thomas Cook that continues to be a major employer in the UK,” Fankhauser said in a statement. He added: “Thomas Cook needs to make the proposed changes to secure our future.” The move is the latest blow for the high street, which has seen a spate of retail administrations and shops disappearing, including electronics firms such as Comet.
Travel firms and airlines across Europe have seen bookings fall over the last two years, hit by the Eurozone 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. The firm, which appointed former Premier Farnell boss Harriet Green as chief executive last May, is undergoing a turnaround strategy under which it has already cut 168 stores and 1,100 jobs.
Shares rose slightly by 0.5 pence to 86p last night, with Investec analysts saying the cuts were already factored into its estimates for the group.