Tui Group plans to permanently reduce its overhead cost base by 30% following the coronavirus crisis.
In its half-year results announcement this morning, Tui Group said to ensure that its operational performance can continue in a globally weakened market following the pandemic, it is now implementing extensive cost-cutting measures.
“This will further accelerate the transformation to a digital platform company that has already been initiated,” it said.
Chief executive Fritz Joussen said: "Tui should emerge from the crisis stronger. But it will be a different Tui and it will find a different market environment than before the pandemic. This will require cuts: in investments, in costs, in our size and our presence around the world.
“We must be leaner than before, more efficient, faster and more digital.
“We will implement our "asset right" strategy, which we launched in 2019, even more purposefully and quickly. We will become more digital at all levels – in particular, we will accelerate the expansion of digital platforms in new markets and for our activities in the destinations.
“We are targeting to permanently reduce our overhead cost base by 30% across the entire group. This will have an impact on potentially 8,000 roles globally that will either not be recruited or reduced.
“In order to return to the successful development of the past years after the crisis, we must now implement the realignment quickly.”
The group received a bridging loan of €1.8 billion in March to cushion the unprecedented effects of the pandemic until normal business operations can be resumed. In April, the banks providing Tui’s existing credit line of €1.75 billion also gave their approval for the contractual integration of the new credit.
Tui added that the loans received are to be repaid within a short period of time “and the high level of debt is to be rapidly reduced again”.