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Have they lost the plot?

1 April 2013

Updates from the latest consultations with Thomas Cook management

Hardly a day goes by without yet more evidence emerging of the utter incoher-ence of the company’s plans to impose ‘cluster management’ on core stores.

Thomas Cook has now compiled a list of companies where cluster management is already in operation. It is basing its own proposals for cluster management on the experiences of these companies. Top of the list is Co-op Funerals!

Doesn’t Thomas Cook’s new management team understand the difference between selling someone a holiday and burying them? What’s the customer retention rate of the average Co-op funeral parlour? Do they get many repeat customers?

Another company cited by Thomas Cook as an example of cluster management in practice is Aurora, which owns clothing stores such as Oasis and Warehouse. Do the people in Peterborough think that selling someone a holiday is just like sell-ing someone a pair of underpants? Other companies referred to by Thomas Cook include WH Smith, Dixons, Optical Express and the notoriously low-pay and anti-union Starbucks chain. Anyone would think that Thomas Cook is now being run by a bunch of people with zero experience of the travel trade. The problem is: it is. And that’s why their cost-cutting proposals such as cluster management make no sense at all.

Where has the money gone?

£225,000,000 spent ‘integrating’ Thomas Cook and My Travel after the 2007 takeover.

£208,000,000 spent by Thomas Cook on other ‘integrations and re-organisations’, 2007-2011.

£17,000,000 - Manny’s salary during his last five years in post.

£1,170,000 - the value of Manny’s golden handshake.
 

Getting rid of store managers will certainly save some money on salaries. But that will be dwarfed by the loss of sales resulting from the new management structure.
Thomas Cook has decided to organise roadshows to try to ‘sell’ the idea of cluster management to managers. Get along to your local roadshow. Make sure Thomas Cook understands why staff are rightly opposed to their madcap plans for cluster managers.

YOU COULDN’T MAKE IT UP!

Thomas Cook claims that there will be “no fundamental difference” between existing CSM roles and the proposed assistant manager roles in core stores.
That’s their excuse for keeping assistant managers on a CSM’s rate of pay. But if assistant managers are just CSMs by another name, who is going to perform the functions of a store manager? Apparently: no-one at all!

According to the minutes of the 13/03/13 Distribution Voice Forum meeting, assistant managers will “assist” in the delivery of targets, while cluster managers will be “accountable” for their delivery. So, no-one will actually have direct responsibility for delivering targets.

Assistant managers won’t. They are just CSMs by another name. Their role is to “assist” (a non-existent store manager). Cluster managers won’t either. They are “accountable” for the delivery of targets (by a non-existent manager).  And a cluster manager with five stores in her cluster certainly won’t be able to function as a stand-in store manager for all five stores! Result: No store management on a day-to-day basis.

CSMs in core stores should demand the right to attend the roadshows about cluster management. They should have the right to voice their opinions about the proposal – they could end up getting even a worse deal than many store managers.

IGNORING THE EVIDENCE

Over the past week staff in a number of stores have contacted the TSSA about their experiences of ‘straddle manage-ment’. The sequence of events in each case is exactly the same: Store makes substantial profit; in-store manager leaves and is replaced by a straddle manager; store makes a loss; in-store manager returns; store returns to profit. In all cases this was straddle management of just two stores – not cluster manage-ment of up to five or six stores! The evidence that cluster management won’t work is staring the company in the face. They should face up to it and drop the proposal.

ANOTHER FALSE ECONOMY

Thomas Cook is proposing to scrap all non-selling posts in large stores. But sales consultants want to earn commission from selling holidays – not get bogged down in back-office duties. Result: more write-offs, as no-one picks up the workload from the axed administra-tion roles. Over a year as a whole the cost of write-offs could easily outstrip the nominal savings from scrapping admin posts.

Please encourage any of your colleagues who are not members of the TSSA to join. The easiest way of joining is on-line:
http://www.tssa.org.uk/join

£40,000,000 - the price paid by Thomas Cook for Co-op Travel takeover.

£100,000 - Total annual profit of Co-op Travel in last year before Thomas Cook takeover.

803 - Number of Thomas Cook stores before Co-op Travel takeover.

1,204 - Number of Thomas Cook/Co-op Travel stores after takeover.

874 -  Proposed number of Thomas Cook/ Co-op stores after current consultation.

Large-store CSMs - another Thomas Cook own goal

Most discussion about CSMs at Voice Distribution Forum meetings has focused on what would happen to CSMs in core stores if cluster management were to be introduced. But the jobs of CSMs in large stores are also under threat. Thomas Cook wants to introduce a man-agement structure in the large stores whereby only one member of the manage-ment team is present during store trading hours.

According to documentation issued by Thomas Cook on 6th March, there were 67 large stores with a management team above this level, requiring a 25% cut in the number of CSMs in this position.

According to the Distribution Voice Forum minutes of the meeting of 20th March, there are 77 stores affected, and a pool of 191 staff at risk. Like virtually all of Thomas Cook’s pro-posals, this is another supposedly cost-cutting exercise which will only backfire in the long run.

What will happen if, say, the store man-ager is on annual leave and the store CSM is taken ill? At present there are ‘spare’ CSMs, either in the same store or a neighbouring store, who can be moved around to ensure that the store does not operate without a member of a management team.

But slashing the number of CSMs will make this impossible. More stores will end up operating for longer periods of time with no management team member present.
(And no CSM can be moved in from a core store to provide cover – all CSM posts in the core stores are to be axed.) As a result, the store’s business performance would be likely to decline.

And how much of a saving would the cut in the number of CSMs achieve anyway? Many CSMs are paid less than sales con-sultants with longer service who have con-sistently been ‘A’ or ‘B’ performers. (This is not suggest that the latter should be made redundant instead. The point is members of management teams are not necessarily paid more than the people they manage.) Nor would there be any attraction for existing CSMs to apply for the remaining CSM role(s). (Given the opening hours of some stores located in shopping arcades, they would need more than one CSM.) First and foremost, there is the increased responsibility and workload that goes with being the remaining CSM. Given the overlap between stores where there are supposedly ‘too many’ CSMs and where admin jobs are to be cut, even more back-office work and even more responsibilities will be dumped onto the shoulders of the remaining CSM. Many stores are already understaffed. As some employees are re-deployed from shops due to close, this will reduce the level of understaffing to some degree. But even allowing for this, understaffing is increasingly a permanent feature of many Thomas Cook stores.

CSMs in the proposed new structure could easily find themselves constantly trying to keep stores functioning with insufficient staff, and no other CSMs to turn to for assistance.

Cutting back on the number of CSMs is not just a problem for the CSMs themselves. It will also create major headaches for the store managers, as they will not have the back-up of their current complement of CSMs. Removing ‘superfluous’ CSM posts from large stores will only add to the current spiral of decline. Less CSMs will mean less effective management, meaning less sales, meaning more unprofitable stores, meaning more store closures. In some stores CSMs have lost all confidence in Thomas Cook and prefer to leave now (without a redundancy package) rather than wait and see if the company implements its proposals.

As one CSM has put it: “Expecting shops to perform with less and less staff with less and less money in their pockets, with reduced incentives and staff discounts, and with no pay rise – UNREALISTIC!”

 

“We are in parallel discussing ventures, deals, and programmes around the asset-light model to drive symbiotic strategies with other major parallels."
(Harriet Green, quoted in ‘Travel Trade Gazette’, 13th March.)

As posts from various readers commented:

“And the last sentence means?”

“Most of Harriet’s phrases are not known to the man in the street, and certainly not to the remaining staff in stores.”

“You have pleased the City with your actions and upset employees, so at least communicate in a clear concise  manner that is easily deciphered by all.”

Footnote: Dictionary definitions of ‘symbiotic’ include: “A close prolonged association between two or more organisms of different species which may, or may not, benefit each member (e.g. parasitism).”
 

 

Thomas Cook ‘Cluster Management’ Roadshows Shows Kick Off at 1.00pm

Date
Venue Regional Split
thurs 4th April Leicester Tigers Rugby Club Leicester & Northants, Nottinghamshire, North Anglia, South East Mids, South Anglia, SW Mids
Fri 5th April Bradford City FC West Yorks, South Yorks, North Yorks, Greater Manchester, South Lancs, Derbyshire
Mon 8th April Belfast Jurys Inn Northern Ireland
Tues 9th April Glasgow – Celtic FC Central Scotland, Cumbria & North Lancs, North East, Sw Scotland, Highlands &Amp; East Scotland
Weds 10th April Crewe Alexander FC Cheshire &Amp; N Wales, Merseyside, NW Mids
Fri 12th April Swindon Town FC Home Counties, Kent, London, South Coast, South West Wales, Surrey & Sussex, West Country, Western

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