Thomas Cook cuts pay and 1,500 jobs

Thomas Cook, Europe's second-biggest travel agent, is shedding 1,500 jobs in Britain and asking staff who remain to accept pay cuts of as much as 15 per cent.

The job losses will form the bulk of the 2,600 redundancies across Europe announced last week in response to a 12 per cent fall in winter bookings since the 11 September terrorist attacks. Thomas Cook's 12,500 UK employees face a precarious future because only 700 of the 1,500 redundancies will be voluntary.

A spokeswoman said the upper echelons of the workforce were in a more uncertain position than cabin crew or shop-floor workers, some of whom are paid less than £10,000 a year. She said: "It's going to be the pilots and the managers who earn above that figure who face the pay cuts. But the cuts are a necessary measure to alleviate more redundancies than we have to."

Ironically, the number of bookings for November is about the same as last year's figures but demand for future travel has dwindled. "We are not getting the bookings for summer travel. It seems that people are not willing to commit themselves to future travel," the spokeswoman said.

The Transport Salaried Staff Association (TSSA), which has more than 3,000 members involved in tourism, said the temporary slump in travel could do permanent damage to individuals working within it. Jo Twite, the development manager, said: "It looks as if business will pick up but that's not going to help those who will lose their jobs. It is bound to have some long-term damage on them."

The TSSA, which was gauging members' reaction to the news yesterday, predicted many were resigned to the prospect of pay cuts in the "traditionally low-paid industry" in the hope their jobs would be spared.

Ms Twite said the state of crisis was not unique to events post-11 September. A similar downturn in trade after the Gulf war was soon reversed once the conflict was over.

"We had difficulties like this during the Gulf war and we talked to the employers then of the temporary reduction in pay to fend off redundancies. There were about 500 redundancies made, but less than there would have been otherwise."

A spokesman for the Association of British Travel Agents said terrorism had affected the tourist trade as a whole and that it was only right for companies to take a realistic attitude towards the present trend of people travelling less.