Tuesday, June 26, 2007

Job losses are bad - but so is being unrealistic

Nobody would really say they were surprised when they heard today that the new Thomas Cook Group is planning to close 150 shops and a number of offices, potentially putting up to 2,800 jobs in the firing line.

Perhaps the figure is somewhat higher than expected but the strategy is hardly a leftfield move from Manny and co.

Unfortunately mergers always lead to business functions from existing companies being combined.

Couple this with the obvious pressure on existing High Street agencies belonging to Thomas Cook and MyTravel from the internet and the old model was clearly unsustainable.

Let's hope TCG make good on their promise to "redeploy" agents into other areas of the newly formed business.

What staff representatives - in this case the Transport Salaried Staffs' Association - must ensure is that pressure is put on TCG to re-train as many of the affected staff as possible so their undoubted knowledge can be used elsewhere in the business.

To lose that many highly skilled people would be disastrous for TCG - and for the employees themselves and towns such as Rochdale.

A TSSA spokesman on the Telegraph website this evening said:

"This is terrible news for Rochdale and the North West and will also be bad news for consumers across the UK, for it will mean less choice in the high street when it comes to holiday bookings."
The spokesman is absolutely correct about the impact on regions where many jobs could be lost, but some might suggest that is where the argument ends.

It is because consumers are finding there is enormous choice on the internet for holiday products that Thomas Cook, MyTravel, Thomson and First Choice have been steadily closing shops anyway.

NB: There is also a healthy independent travel agency sector in the UK.

Kevin May, editor, Travolution

Technorati tags:


Darren Cronian said...

Sad news for workers, but even without the merger, don't you think that eventually we would of seen staff cuts as travel companies find that consumers are shifting away from the traditional travel agency to the internet.

Lee said...

Darren they're not shifting from the " Traditional Travel Agency"
they are moving to " The Traditional Travel Agency" and away from the multiples.
Since When have the big 4 been Traditional??
Long live the Independents

Travolution Blogger said...

Lee: The Big Four have always been seen as the "traditional" players - as well as the independents such as yourself - because despite being vertically integrated they had traditional distribution channels (offline).

Travolution Blogger said...

Darren: The closure of shops is hardly breaking news. Independent agents and the vertically integrated have seen shop closures for years.

The merger of Thomas Cook and MyTravel came with a "cost-saving" attached to it.

Where there is an overlap of shops in towns, at least one will be closed.

The other side to this is that shops will not be bringing in the revenues they once were (because of the web), so savings will be made there.

Darren Cronian said...

I never said it was breaking news ;)

I’ve blogged about this topic many times in the past, plus a recent observation after a wander around the city centre.

I think its bad news when a high street travel agency closes down and shifts online, because consumers loose another channel to book their holiday, and not all of us are internet savvy or willing to book online, with fears of security, frustratingly designed sites.