Kuoni is to begin a period of consultation as part of a full strategic business review amid the coronavirus crisis.
The company said it was looking to reshape the business in order to "grow and thrive in the future".
Der Touristik UK chief executive Derek Jones praised staff for their "unswerving support and commitment over the past three months, a time which has tested the company to the limit".
In a letter to staff, Jones outlined every step that has been taken to try to rule out compulsory job losses, including voluntary redundancy, reduced working hours and recruitment freezes in addition to maximising the support of the job retention scheme.
"In the short term we will be a smaller business, but by taking these actions now we can see our way through it and emerge stronger in the future," he said.
"We have one of the most envied brands in the travel industry, and we must now look at a roadmap to recovery so we can thrive in the years to come.
"As we move into the next phase of the crisis beyond the support of the Job Retention Scheme, we will need to adjust our plans in line with reduced demand, which means we have to take some very difficult decisions."
Jones continued: "We’ve done everything we can to try to retain jobs and manage our way through this, but we are now faced with a set of circumstances where we have exhausted all other options.
"Throughout the crisis we have strived to do the right thing for our customers, giving refunds where no other option has been possible. We’ve been open and honest with our team from the outset about the severity of the situation and, without exception, everyone has been brilliant and I could not be prouder of them.
"We’ve always said our people are the difference. The talent we have at Kuoni is second to none and it’s my hope that we can support everyone personally and professionally at what is undoubtedly the most challenging time our industry has ever faced."
The number of potential compulsory redundancies has not been confirmed. Kuoni employs just less than 500 staff in the UK and overseas.