Multinational travel firm TUI Group has announced that it will slash 10 percent of its workforce worldwide in an effort to cut costs amid the coronavirus pandemic.
In its half-year financial results presented on Wednesday, the company said it will have to reduce operational costs to cope with the fallout from the pandemic, “the greatest crisis the tourism industry and TUI has ever faced.”
“We are targeting to permanently reduce our overhead cost base by 30 percent across the entire Group. This will have an impact on potentially 8,000 roles globally that will either not be recruited or reduced,” CEO Fritz Joussen said in a press release.
The company announced the job cuts despite being given a government lifeline. German lawmakers approved a €1.8 billion loan for the firm in March to cushion the impact of the crisis.
Though the pandemic is still raging across the globe, Joussen believes that people already want to travel and the company is ready for an early resumption of activities in Germany and elsewhere in Europe. As the travel industry will evolve even faster after the crisis, the firm expects that European holidays will restart in July, and tourism will fully recover in 2022.
“Summer holidays in Europe can now gradually be made possible again,” the CEO said. “We will reinvent the holiday in 2020.”
Travel restrictions imposed by governments across the globe have weighed on the Anglo-German firm’s earnings, as its services were stopped in the spring. The group reported a net loss of €763.6 million for its second quarter to March.
Many travel companies are struggling to keep afloat amid the pandemic, seeking bailouts and reducing their workforce. Virgin Atlantic, which is seeking financial support from the UK government but has received no approval so far, plans to cut more than 3,000 jobs to mitigate the impact of the Covid-19 crisis. According to the head of London’s Heathrow Airport, the airline could go bust without government aid.
TUI employs around 70,000 people across 100 travel destinations. The group was planning job cuts even before Covid-19 triggered border closures, almost halting global travel. Last year, the group planned to slash 450 jobs in Germany and was seeking to digitize more of its business.
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