Thomas Cook plans to cut 2,500 jobs in the UK as a part of its turnaround strategy which also involves the closure of 195 UK stores among its 1,069 high street travel agencies. Most of the job cuts would be within its retail network and in back-office and administrative positions. Specifying the locations at risk of job losses, Thomas Cook said its head offices at Peterborough in east England, Preston and Accrington offices in the north west are likely to bear most of the redundancies.
Thomas Cook job cuts amount to 16% of its 15,500 workforce in the UK and Ireland. The job cuts at Thomas Cook are a result of its struggle over the past two years with falling sales leading to a string of profit warnings, forcing it to renegotiate bank loans and make disposals to cut debt. Earlier this week Thomas Cook said it had decided not to sell its under-performing French business and would instead begin a restructuring programme to revive the unit.
The decision to cut jobs was blamed on last year’s deep losses. Thomas Cook reported a statutory loss of £590m for the 12 months to the end of September – worse than the £518m loss recorded the previous year. Shares in Thomas Cook, which have risen 78% so far this year, were 0.3% up at 85.6 pence by 12.25 pm, valuing the business at around £777m.
Thomas Cook got into financial peril in 2011 when its overseas operations went haywire. Unrest in the Middle East and North Africa affected its extensive operations in Egypt and Tunisia. Since then, the travel company has struggled with high debt and the wider downturn in the global travel sector, running into debts of about £788m.