9 March 2004
FRANKFURT – Thomas Cook, the German travel operator reeling from severe losses last year, announced plans Tuesday to cut its work force in Germany by 10 percent by 2005.
Germany’s second-largest tourism concern currently has a payroll of 5,000 in the country, out of a total worldwide employment of around 26,000.
Thomas Cook, equally owned by Lufthansa and Neckermann, posted EUR 251 million in net losses in the 2002-2003 business year ending last 30 September. The red ink came on a 10.1 percent drop in revenues, to EUR 7.2 billion.
Besides the payroll reduction plans, Thomas Cook is embarking on a cost-cutting effort.
Its 48 top managers are to take a 10 percent salary cut through 2006, while the company’s main travel office in Munich is to be moved to company headquarters in Oberursel, outside Frankfurt.
Company chairman Wolfgang Beeser said Thomas Cook was expecting 4 to 6 percent revenues growth in the current 2003-2004 year. The company will still post a loss, but substantially reduced from last year’s red-ink, he said.
The company’s problems come amid the steep downturn in the German and worldwide travel sectors over the past few years following the 11 September 2001 terror attacks, economic stagnation, the war in Iraq and the SARS crisis in Asia, analysts noted.
Subject: German news