Ebookers cuts 15% of workforce as sales soar

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Ebookers, the online travel agency, yesterday predicted the decline of short-haul tour operators as it axed 270 jobs to cut costs, including 70 in India.

Dinesh Dhamija, the chief executive of ebookers, which specialises in long- and mid-haul destinations, yesterday said many short-haul operators would not survive without a radical change in their business model. "There is so much capacity in the short-haul market. Commissions have fallen to 1 per cent recently, from 6-8 per cent this time last year, and they could go down to zero. Operators in this market will have to start selling other products rather than just administering flight bookings, or they will get eaten up," Mr Dhamija said.

But ebookers, which was one of the first major UK company to start offshoring jobs to India, is also taking pains to cut costs. The company now says it needs to axe at least 70 administration jobs it has in Asia, bringing the total employed there down to 680.

The company will make 170 people redundant in the UK despite a 47 per cent leap in sales over the first quarter of the year. The job cuts represent 15 per cent of ebookers' workforce and could save the company about £2.5m.