TUI to Axe 3,600 Jobs

HAMBURG ~ TUI, Europe’s leading travel and tourism group, has unveiled plans to axe thousands of jobs as part of a 250-million-euro (US$330-million) cost-cutting drive aimed at steering the group back to higher profits.

At the same time, chairman Michael Frenzel rejected calls to sell off the ailing shipping division.

TUI, whose group-wide earnings are currently suffering from the low profitability of its shipping business, which was recently expanded via the acquisition of Canadian firm CP Ships, presented a wide-ranging action plan to get itself ship-shape at a news conference in this north German port.

TUI has lowered its forecasts for the next two years and said it would waive the dividend payment for the 2006 business year.

In order to correct the situation, the tourism giant said it would slash 3,600 jobs, cut costs by 250 million euros, move into the high-volume cruise market and push internet sales.

Of the total jobs being axed, some 2,600 would be cut in Britain, 400 in Germany and 200 in France, with the rest to be spread over all of the countries where the group was present.

“Without further growth and an adjustment of our cost structures, we would risk our market position,” chief executive Frenzel warned.

“Improvements in our cost structure in combination with profitable growth in new and existing business segments are the only way to ensure our future strength.”

At the same time, TUI said it planned to create 3,300 new jobs in specified areas by 2008, “including several hundred new jobs in Germany.”

TUI is currently active in the luxury cruise market. But it plans to move into the high-volume cruise segment by taking a 25-percent stake in a joint venture with world leader Carnival, it said.

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