Thomas Cook Group plc (LON:TCG), the oldest travel firm worldwide said it would restructure its business in the United Kingdom and it would cut 2,500 full-time jobs. The company also closing 195 of its high street travel agencies in the country as its business has been affected by the crisis in the European region, high fuel costs and the turmoil in primary destinations such as Egypt and Turkey, according to report from Reuters.
According to the travel company, the job cuts will affect those in back-office functions and retail networks particularly the employees working in stores that will be shutdown.
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Peter Fanhauser, CEO Continental Europe & UK of Thomas Cook Group plc (LON:TCG) said the company’s decision is never easy because it will directly affect its employees. However, he explained that company owes to customers to improve its business and ensure that the administrative costs are as low as possible when they book their holidays.
“As we improve and develop our online capabilities, maintaining a strong presence on the High Street is an important part of our omni-channel strategy. Even after these changes, we will still have one of the largest retail networks in UK travel,” said Fanhauser.
He also added that Thomas Cook Group plc (LON:TCG)’s restructuring efforts will make it a stronger and it will continue to be a major employer in the United Kingdom. The firm said it is consulting with its union and employee representative bodies to minimize the impact of the job cuts and store closures.
Sharon Ainsworth, an officer at the Usdaw shopworkers’ union said, “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.
Thomas Cook’s head offices in Peterborough and Preston would be affected by the workforce reduction. The company said it would close its office in Accrington.
Over the past two years, Thomas Cook Group plc (LON:TCG) has been struggling with weak sales. As a result, the travel company was forced renegotiate its banks loan, to sell off planes and stores to reduce its debt amid consecutive profit declines. Its new CEO Harriet Green managed to improve the company’s financial situation by cutting its $1.5 billion pounds debt by selling some assets including its Indian business and a number of Spanish hotels.
Last month the Thomas Cook’s reported that its operating losses improved during the first quarter and its recovery plan was on track.
The travel company has a total of 1,069 stores in the United Kingdom and 15,500 employees in both UK and Ireland.