Tui Travel to cut jobs to save £150m by 2010

29-01-2008

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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