* Plans to cut 2,500 of its 15,000 UK staff
* To close 195 stores, leaving 874 UK outlets
* Share price rises
By Rhys Jones
LONDON, March 6 Travel firm Thomas Cook
said it would cut 2,500 UK jobs and close 195 stores in Britain
as the euro crisis, high fuel costs and unrest in key
destinations like Egypt and Greece take their toll on the
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
while facing a string of profit warnings.
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 total workforce of 15,500 in the UK and Ireland.
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 also plans to change the terms and conditions of some
"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 travel industry outsider Harriet Green took over as
CEO last May, the company has seen a steady improvement in its
finances following a series of disposals to slash its 1.5
billion pounds ($2.3 billion) 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, an officer at the Usdaw shopworkers' union.
Usdaw said Thomas Cook planned to replace store managers
with cluster bosses, while also removing a layer of management
at its 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 first-quarter
operating losses and said its turnaround plan was on track.
Shares in Thomas Cook, which have risen 78 percent so far
this year, were 1.5 percent up at 86.7 pence by 1410 GMT,
valuing the business at around 780 million pounds ($1.18
Peel Hunt analyst Nick Batram said the move provided clarity
to the company's turnaround plan and would be welcomed by
Britain's unemployment rate stood at 7.8 percent in the
three months to the end of December 2012, with 2.5 million
people jobless, official data showed.