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Wednesday, 31 October, 2001, 15:24 GMT
Thomas Cook axes UK jobs
Beach in Mauritius
Fewer people are escaping to the sun
Travel giant Thomas Cook has confirmed that it is to axe 1,500 jobs in the UK, 16% of its British workforce.

And the firm is asking staff to take a pay cut of up to 10% as it struggles to cut costs and survive the sharp downturn in the tourism industry.

Whilst the measures we are taking are very unfortunate, they are also necessary at this time

Alan Stewart
Thomas Cook boss
The company, Europe's second largest travel firm, had previously said that it was making 2,600 redundancies but did not specify how many of these would be in the UK.

UK executives have agreed to cut their pay by 15% and the company is asking staff who earn more than 10,000 to reduce their salaries by between 3% and 10%.

The company has seen its profits squeezed since the 11 September terrorist attacks which have led to a significant fall in holiday bookings for this winter and next summer.

"We are currently experiencing very tough market conditions. Whilst the measures we are taking are very unfortunate, they are also necessary at this time," said chief executive Alan Stewart who has already signed up for a 15% of cut.

Peterborough casualties?

Half the job cuts will be compulsory as the German-owned group moves to make savings of 140m over the next year in this country.

Thomas Cook operates 700 High Street travel shops in the UK as well as the Thomas Cook and JMC tour operators.

The company employs about 30,000 people across Europe.

Its operations, distribution and internet business is based in Peterborough, Cambridgeshire, employing 1,600 people.

Last week, the company said it was grounding some charter flights and closing 100 travel agencies, after reporting a 12% fall in bookings.

'No short-term change'

Thomas Cook is jointly owned by German airline Lufthansa and department store group KarstadtQuelle.

The company is trying to keep annual profits steady at last year's level of 160 million euros (100m).

But new bookings across the group for the winter season were down by 12% on last year.

"At present we have no indication that this situation will change in the short term and our responsibility to our company and our employees leads us to implement certain measures to safeguard our financial position and secure our continued success," said Thomas Cook chairman Stefan Pichler.

Rival firm Preussag is also under pressure, and is rumoured to be poised to cut 400 UK jobs.

Last year, Germany's Preussag bought the Thomson travel group - owner of the Lunn Poly brand - to become the largest travel firm in Europe.

See also:

02 Oct 01 | Business
Nervous tourists cancel trips
27 Sep 01 | England
Jobs go at Thomas Cook
07 Dec 00 | Business
German firm buys Thomas Cook
26 Oct 01 | Business
Thomas Cook cuts 2,600 jobs
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