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Thomas Cook job cuts are necessary, says expert

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Thomas Cook job cuts are necessary, says expert

By Melanie Hall

Thomas Cook job cuts are necessary, says expertThomas Cook Group’s decision to cut 2,500 jobs and close 195 stores has gone down well in the City as a much-needed restructuring following its “dismal” financial performance, said a leading analyst.

Douglas McNeill, investment director at stockbrokers Charles Stanley, told Travel Weeklythat the move, although sad for those at risk of losing their jobs, was necessary.

“The City is pleased to see restructuring taking place,” said McNeill. “No-one is ever keen to see other people losing jobs so the restructuring that is underway is tempered by thoughts about those losing jobs, but it’s beyond question that things needed to change at Thomas Cook.

“I would say that the City has thought something like this was on the cards for quite some time. The management has led the City to expect cost savings without being particularly specific.”

“lt hasn’t required much imagination to realise that a lot of reductions was on the way,” said McNeill, as it is doing less business than it used to.

“Capacity is down this summer season, 4% down at the last count,” he said. “That’s not the first such reduction. Reduction in the winter season was greater than that. Sooner or later, you are going to conclude that you are going to need fewer staff.”

McNeill said that Thomas Cook’s chief executive Harriet Green was instilling confidence because of her plans to cut costs.

“Financial performance has been dismal for quite some time and the share price tells you that the City is confident in Harriet Green’s ability to restructure,” he said.

Thomas Cook saw its share price drop by more than 4% yesterday in the wake of the travel group’s mass jobs cut announcement a day earlier.

Shares in the company were down 3.5p to 82.5p but this was more than 15% below its 52-week high of 97.38. At yesterday’s rate, the group’s market capitalisation was £787.92 million.

Cook is to cut 2,500 jobs and close almost 200 agency branches as part of a financial turn around plan. An update on the business transformation plan and new strategy for the group is due to be given by chief executive Harriet Green on Wednesday.

A brief trading update will be given ahead of first half results to be announced in May.

Thomas Cook staff talk of shock and anger at store closures

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Thomas Cook staff talk of shock and anger at store closures

Thomas Cook staff talk of shock and anger at store closuresThomas Cook staff who have been told their shops have been earmarked for closure have spoken of their shock at Wednesday’s announcement.

The company revealed that 2,500 jobs were under consultatation, more than 900 of which will be from the retail estate. The rest will be back office roles at its premises in Accrington, Peterborough, Preston and Egham.

One staff member who wanted to remain anonymous and who was told her shop would soon be closing told Travel Weekly:

“We feel we’ve been treated absolutely appallingly. We are an A performing store and we were told categorically by our regional sales manager that no shop closures were imminent.

“We have very long-standing staff in our store. We have worked so hard during peaks, including Sundays and evenings with no extra pay, just to make the shop a success.

“We’ve been told not to tell any customers or staff who aren’t in today about the closures, we just have to smile and get on with it. The staff have been left reeling, we feel shocked and sick.”

Another staff member wrote on travelweekly.co.uk: “How sad and unfair, I have two kids, rent and I feel like my life has just been put in to overload, what will I do?”

A stream of comments, many purporting to be from staff, on Travel Weekly’s original story revealed the depth of anger among many employees who are either facing redundancy or changes to their current terms of employment, as Cook confirmed to Sky News yesterday.

Recruitment consultants have suggested some Cook staff may become homeworkers, while others may be forced to leave the industry.

Thomas Cook to cut 2,500 jobs

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Thomas Cook to cut 2,500 jobs

Thomas Cook Group is to cut 2,500 jobs across its back office and retail network.

The group also plans to close 195 stores as part of the restucture of the UK business.

A 90 day consultation begins today over the future of 2,500 jobs, both back office and retail. The group currently employs 15,500 people in the UK.

The back office roles will include staff at the head offices in Peterborough and Preston. The consultation also includes the proposed closure of the Accrington office.

Stores will close which do “not meet the performance targets of the business” and are in areas where Thomas Cook has more than one retail outlet.

Peter Fankhauser, chief executive Continental Europe & UK, said:  “It is never easy to make decisions that impact directly on our people, but we also owe it to our customers to shape the business effectively and ensure that, when they book their holiday with us, our administrative costs are as low as possible.

“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.

He added: “It is essential that we operate with the right number of people as we move forward into the next era for our company, allowing us to meet the future needs of our customers more effectively.

“These proposals will mean a stronger Thomas Cook that continues to be a major employer in the UK dedicated to providing excellent holiday experiences to our 23 million customers. We are in consultation with our unions and employee representative bodies to minimise the impact of these changes and I am speaking personally to all employees today to provide information and support through this period of consultation.”