Thomas Cook today said it will close 200 stores over the next two years as it battles to turn around its ailing UK business.
It had already said it expects to close about 75 sites following its merger with the Co-op's UK high street travel business, which left it with more than 1,300 travel shops, but today said a further 125 will be shut.
The group also revealed it had slumped to a £398 million pre-tax loss in the year to September 30, compared with a £42 million profit in the previous year, after it was hit by poor trading in the UK and the Arab Spring put tourists off travelling to Tunisia and Egypt.
It also wrote down the value of its UK and Canadian businesses.
Staff in 115 of the stores are expected to be informed that their branch is due to close today, leading to the loss of 661 jobs. The rest of the store closures will be announced over the next two years.
The group, which sells more than 22 million holidays a year in the UK, delayed its results last month as it revealed it had gone back to its lenders to ask for an additional £100 million lifeline.
Its shares slumped 75% in one day amid fears for its survival but the 170-year-old company claims it is now on a sound financial footing.
The group said the first quarter of its new financial year had got off to a slow start.
While there had initially been an "adverse impact" on bookings in the UK following its announcement, it said it was encouraged by customers' response to its recent summer promotion.
Bookings from UK customers for next summer were 8% ahead of last year although it has also cut capacity by 8%. But UK bookings for the current winter season are down 11%.
The company sought to play down fears that customers will steer clear of booking with Thomas Cook amid worries over its future.
Following the negative headlines over its deal with lenders, rival TUI Travel ran adverts under its Thomson brand that claimed: "Another holiday company may be experiencing turbulence, but we are in really great shape."
Thomas Cook's interim chief executive Sam Weihagen said: "Customers have been very supportive in recent weeks and are continuing to book with Thomas Cook.
"Bookings outside the UK were broadly unaffected by news of our refinancing and in the UK bookings have recovered well.
"For over 170 years Thomas Cook has provided customers with fantastic holiday experiences and we will continue to do so."
He told BBC Radio 4's Today programme that the 200 stores to be closed were not profitable.
He said: "As the increase in e-commerce continues, we will have to review the number of shops we have in our estate. As long as the shops are profitable, we will keep them."
Asked if any others were unprofitable, he said: "For the time being, no. I think there will always be a need for shops. You can always discuss how many."
He described today's results as "a mixed bag", pointing to record profits from its businesses in Germany and Scandinavia but said he was trying to address problems in its underperforming UK and French businesses.
Manuel Cortes, general secretary of the Transport Salaried Staffs Association, said: "This is deeply disappointing news for Thomas Cook staff, especially at this time of the year in the run-up to Christmas.
"We want immediate talks with the company's chief executive to see just what we can do to mitigate the impact of this announcement on our members."