Thomas Cook raises UK job cut fears in ‘tough’ 2011
Thomas Cook today raised the spectre of big job cuts in the UK as it prepares to fight difficult trading conditions next year.
Chief executive Manny Fontenla-Novoa said: "I would say this has been the toughest year that I've had to deal with — tougher than 9/11. I'm much more cautious for the UK than other markets."
Analysts leaped to cut their profit forecasts on the group, sending its shares down 7% — or 12p — to 171.3p in reaction.
Fontenla-Novoa warned that he had to cut costs in the UK after overheads rose faster than he had expected in recent months. Those increased expenses would reduce operating profit by £10 million in the financial year which ends on Thursday, he said. Part of the increase was because of aircraft leasing costs being higher than expected.
Talking of the shake-up in the UK, Fontenla-Novoa said: "The review is comprehensive and we are looking at every single cost-cutting opportunity in our business. They include staff costs, suppliers, overheads, IT. We are taking stock of the situation, trying to foresee what the trading conditions will be like next year and cutting our cloth accordingly."
Thomas Cook and peers such as TUI Travel suffered badly this year as weak consumer confidence, the volcanic ash cloud and the World Cup prompted those going on holiday to call off their trips.
