Question

Thomas Cook collapses, leaving thousands of travelers stranded By Clare Duffy and Rob McLean, CNN Business Updated 1247 GMT (2047 HKT) September 23, 2019 New York (CNN Business) British tour operator Thomas Cook collapsed on Sunday night, stranding hundreds of thousands of travelers and putting 21,000 jobs at risk. The 178-year-old company said in a statement that its board "concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect" after talks on a financial rescue failed. All Thomas Cook bookings have been canceled; the UK Civil Aviation Authority tweeted. Peter Fankhauser, Thomas Cook's Chief Executive apologized to customers, employees, suppliers and partners. "This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world," Fankhauser said. "Despite huge efforts over a number of months, and further intense negotiations in recent days, we have not been able to secure a deal to save our business. I know that this outcome will be devastating to many people and cause a lot of anxiety stress and disruption," he added. Thomas Cook's business of selling flights on its own airline, along with hotel rooms, from brickand-mortar stores has been under pressure for years from online rivals and low-cost carriers. Brexit has made matters worse by pushing the pound lower (and the company's costs up) and deterring some travelers. The company had reported a loss of £1.5 billion pounds (US$1.9 billion) for the six months to March 31, 2018. The collapse of the iconic UK company had ripple effects in Asia. Shares in China's Fosun Tourism, dropped by nearly 5% in Hong Kong. The billionaire founder of parent company Fosun International, which owns all-inclusive holiday firm Club Med, is Thomas Cook's largest shareholder, according to Refinitiv data. "Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution," the company said in a statement. "We extend our deepest sympathy to all those affected by this outcome," it added. Meanwhile, Thomas Cook India — owned by Canada's Fairfax — said it had nothing to do with the collapse of the venerable British brand and its business was unaffected. Shares in rival European travel groups got a boost on Monday. Germany's TUI (TUIFF) gained more than 6%, while low-cost airline EasyJet (ESYJY) — which is making a big push into the holidays business — were up nearly 4%.

As the Executive Vice President Human Resources at Thomas and Cook:

1. Outline two (2) approaches that should have been used to prepare employees for the inevitable dissolution of the company and the dismissal of staff.
2. Discuss two (2) alternatives to downsizing that would be suitable for Thomas and Cook’s unique situation.

Answer 1

Answer 1= In order to prepare the employee for the possible layoff, the management must do the below mentioned two steps=

Whenever the company is planning to have the layoff in the process, this is being felt well in advance due to lo of market sale or closing down any unit. This event takes place over a period of time. Thus when the company witnessed any of the events that can result in the reduction of the manpower requirement, the company must communicate to the employee that company is facing financial problems and it can result in some adverse decision in future

The company can ask the supervisor and the managers to communicate about the situation of the company to all the employees and advise them to either look for the new job opportunities or the company will be forced to take some unwanted decisions due to prevailing conditions.

Answer 2- The following two methods can be used in place of downsizing=

The company can reduce the working hour of the employees and preparing them to cut their pay scales so that the different expenses can be controlled

The company can shift some of the employees to the department where there are some vacancies and these are needed to be fulfilled. Other than this, the company can also ask the employees to apply for the Voluntary Retirement Schemes so that they can have some additional benefit