Thomas Cook to cut 2,600 jobs

October 26, 2001 Posted: 1149 GMT

LONDON (CNN) -- Thomas Cook, Europe's No. 2 travel company, says it will shed 2,600 jobs after bookings declined following the terror attacks on the U.S.

Thomas Cook and its larger rival Preussag have both experienced a sharp drop in bookings since September 11. Airlines across the globe have slashed more than 100,000 posts as travel declines by about a third.

Chief Executive Stefan Pichler expects a 15 percent drop in sales in the 2001/2002 business year, leading to a 530-million ($470 million) loss in earnings that the firm would absorb with various cost-cutting measures.

The company, owned by German airline Lufthansa and department store group KarstadtQuelle, said it would cut about 10 percent of its 30,000 employees and ground flights.

Jobs will go as Thomas Cook closes 100 travel agencies across Europe, said the company.

The cost-saving plan would keep 2001/2002 earnings before tax and the cost of acquisitions at around the previous year's level of 160 million. Bookings for the winter season have so far fallen 12 percent from a year earlier.

"The whole sector has been hit and other companies will have to react," analyst Klaus Becker at Commerzbank told Reuters.

Thomas Cook, which changed its name from C&N Touristic in May, after the company acquired Thomas Cook, Britain's third-largest travel company, for $780 million.

The company, which operates 73,000 hotel beds, 4,000 travel agents and 85 aircraft, said in late September its British unit was cutting or switching to part-time over 500 jobs as it sought to raise productivity.