Tui Travel to cut jobs to save 150m by 2010


Tui Travel to cut jobs to save 150m by 2010
Tui Travel announced today that it plans to close 100 high street travel agencies in the UK in a move to increase cost savings.

Europe's biggest travel company, formed by a £3 billion merger between First Choice and Thomson Holidays last year, did not say how many of its staff would be losing their jobs.

"It's not small numbers clearly and it's a sensitive issue," Tui chief executive Peter Long said, according to the Times.

"We are very mindful that we want to work through this with our colleagues."

The announcement follows a 100-day-review by Mr Long on cost-saving strategies for the company, which seeks to reign in £150 million by 2010.

The money-saving move would reportedly increase the group's profit margin to 3.5 per cent, up from 2.2 per cent.

"Tui Travel has upgraded the expected synergies from an initial £100 million to now £150 million per annum," the firm said in a statement today.

Demand for mainstream holidays was "particularly strong", according to the statement. Year-on-year sales in the UK were up three per cent during winter 2007/08, while summer 2008 bookings were up 8 per cent.

Looking ahead, Mr Long said that the weak economy, pummeled by subprime losses, would not impact trading results because it was "not a driver of consumer spending on holidays".

Investors have been attracted by the cost-saving efforts, with shares in Tui Travel adding 2.62 per cent to reach 245.25p in morning trading.

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