JOBS could be axed after Peterborough-based travel giant Thomas Cook announced a massive dip in profits yesterday (Tuesday).
Europe’s second largest travel firm, which employs about 2,000 people at its base in Bretton, announced that its rising costs in the UK would knock £10 million off its profit.
The holiday giant warned it was likely to cut jobs but refused to be drawn on how many or where they would be made, although a spokeswoman said it would keep all its high street shops open.
The firm has launched a review looking at making cost savings throughout the company with the results to be released on December 1, when its full profit and loss figures will also be announced to investors.
The industry was rocked by a series of disruptions over the summer period, in particular the ash cloud from an Iceland volcano grounding flights across western Europe while Thomas Cook also had the extra cost of repairs to aeroplanes.
Chief executive Manny Fontenla-Novoa confirmed there would be job losses, but said it was too early to reveal numbers.
He said: “The review is looking at everything from the bottom up and top down. Of course that includes staff, but also suppliers and our overhead structures.”
But there was some optimism in the firm which reported a 13 per cent rise in UK bookings over the last month as people ditched the wet British climate for winter holidays.
John Bridge, chief executive of the Peterborough Chamber of Commerce, said: “Thomas Cook is a very well run and professional organisation and as such is facing up to the reality in finding a solution that protects the majority of people.”
Peterborough MP Stewart Jackson remained upbeat about the company.
He said: “Thomas Cook is a massively important company to Peterborough. It is one of the biggest employers in the city with a very high rate of satisfaction and brings a lot of money into the local economy. It is also a blue chip company that reflects well on Peterborough.
“From my understanding bookings are looking better. If the economy continues its recovery, as expected, I think it will be fine.
“If the company does make redundancies I would expect it to help retrain and reduce the effect of the job losses. But I don’t expect it to come to that.
“When I spoke to them last they were quite bullish about the situation and I remain reasonably optimistic.”
Thomas Cook’s share price slumped to its lowest point for more than a year when the news was announced.
Robin Morton, fund manager at Peterborough stockbrokers Varton and Son, said it was following a national trend.
“Its share price has been dropping since the beginning of 2009. It has certainly underperformed in that period.
“This will shake the confidence of investors in the firm but I don’t think it will have a wider impact.”