Major Tour operator Thomas Cook has confirmed it is to cut 500 jobs in an effort to save money. Many of the jobs cut have been advertised vacancies which will no longer be filled, but 120 managerial staff have already left in the last six weeks. Thomas Cook has insisted that no customer facing roles are currently at risk.
The decision follows a move that has seen the UK business split into three sectors; retail, independent and mainstream, these sectors have been created after a ‘comprehensive overview’ of the UK business and the difficult trading conditions earlier this year.
Thomas Cook are hoping the move will save approximately £40 – £50 million a year and chief executive Manny Fontela-Novoa stated “Given the challenges experienced in the UK this year, and the uncertain outlook, we undertook a comprehensive review of the UK cost base and the structure of our UK operations towards the financial year end.”
The job cuts are just part of the restructuring which also sees the company overhauling its IT infrastructure, reducing buying requirements and renegotiating supplier costs.
The move also coincides with the merger of Thomas Cook’s High street foreign exchange agency with the Co-operative Travel and Midlands Co-op, creating a network of 1,300 branches. This merger is expected to save Thomas Cook £35 million a year with ‘upstream synergies’ saving them an estimated £10 million annually.
The company stated “Whilst the merger is still subject to competition clearance, we are working with the relevant authorities to achieve an expedited clearance” before continuing “we believe that the restructuring, combined with the merger with The Co-operatives, will greatly strengthen our UK business going forward.”
The cost of the merger and restructuring is expected to be around £30 million and will be incurred in the 2010/2011 financial year.
Thomas Cook have also announced that they plan to review their fleet of aircraft and have reached an agreement with Airbus for 12 new A321 aircraft, scheduled for delivery in 2014, at a cost of £96 million per plane.
This news has probably not gone down too well with the unfortunate 500 who are losing their jobs.