Thomas Cook ‘to cut 1,000 jobs in restructuring’

The beleaguered company, which sells more than 22 million holidays a year in the UK, turned to its banks for more financial help following a deterioration in trade driven by weak consumer confidence and unrest in North Africa.

It is now poised to slash costs and sell hundreds of millions of pounds of assets to help reduce its £1 billion debt mountain, a Sunday newspaper said.

The shake-up will start in two weeks when the newspaper understands the firm will announce the closure of 200 of its 1,100 UK travel shops with the loss of 1,000 jobs.

The 170 year-old firm saw its share price plunge 75 per cent last Tuesday amid fears it was on the brink of collapse.

It said it needed extra cash after its French and Belgium markets saw bookings fall by up to 20 per cent in recent weeks, while a move into the Russian market had “got off to an extremely slow start”.

The group has suffered from the impact of the Arab spring, which has hit bookings to Tunisia and Egypt, destinations popular with France and Russia, respectively, as well as UK holidaymakers.

Late on Friday night it announced it had been given a £200m facility to secure its medium-term future, which will replace the £100m facility granted just a month earlier.

The group hopes the agreement will shore up confidence in the business after UK bookings plunged by 30 per cent between Tuesday and Friday amid fears over its future.

Interim chief executive Sam Weihagen this weekend sought to ease fears that the negative headlines would prompt holidaymakers to look elsewhere, telling customers that their holidays were “in safe hands”.

He stressed that in the rest of the group, outside the UK, the company had seen bookings remain level but admitted that it “may take two to three years to come to an acceptable profitability”.

He refused to be drawn on possible shop closures and speculation about thousands of job losses.

Thomas Cook has issued a series of profit warnings amid poor trading in the UK and parted company with its chief executive, Manny Fontenla-Novoa.

The group – which postponed Thursday’s publication of its full-year results until after talks with its lenders have concluded – is expected to report a 31 per cent slide in underlying profits to £191.1m when it updates the market in about two weeks.

Belgian Frank Meysman will take over as chairman on Thursday and is expected to kick-off a boardroom clear-out that could see non-executive directors replaced with new leaders from the Continent.

There are 60 Thomas Cook branches in Yorkshire.