TUI to slash additional costs for 150 million euros

TUI, the world’s biggest tour operator, will cut down on costs this year for an additional 150 million euros ($159 million) and rub out 100 jobs from its headquarters’ payroll in an effort to raise both profitability and competitiveness.

By 2004, the company expects to sock away 100 million euros ($106 million) worth of savings, TUI president Michael Frenzel said.

The Germany-based tour operator will slice costs for a grand total of 260 million euros ($276 million) after announcing earlier this year projected cutbacks of up to 111 million euros ($118 million).

A third of those savings will stem from staff layoffs, while the other two thirds will come from materials, telecommunications, information technology, leasing and sponsorships.

Moreover, TUI wants to wipe out 100 jobs in its headquarters, a figure that accounts for one fourth of the total payroll in the Hannover offices (northern Germany)

On the other hand and contrary to drum-beating whispers, a TUI spokesperson said the company is not interested in purchasing Deutsche BA Airlines, a British Airways affiliate.

The German giant will try its best to avoid furloughing employees on short notice by providing other choices ranging from part-time jobs to renewal of work contracts. The company also intends to conduct an all-out overhaul of labor strategies aimed at fattening its piggybank.

In the Frankfort Stock Exchange this Friday, TUI shares were down by 9.2 percent to just 10,07 euros around 2:15pm GMT, following Merrill Lynch’s slide from the blue-chip deck after the company considered its financial woes are way beyond the bear market triggered by the U.S. war in Iraq.