Ailing holiday firm Thomas Cook is set to axe about 1,000 jobs in a radical restructuring after banks threw it a £200 million lifeline, it has been reported.
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, the Sunday Times 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% on 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% 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 £200 million facility to secure its medium-term future, which will replace the £100 million facility granted just a month earlier.
The group hopes the agreement will shore-up confidence in the business after UK bookings plunged by 30% 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".
Suggested For You
Get top stories and blog posts emailed to me each day. Newsletters may offer personalized content or advertisements. Learn more