Vacation tour operator Thomas Cook says it is considering cutting about a fifth of its workforce as it enters the next phase of a three-year program to restructure its operations.

The company has suffered financially as it struggles to deal with competition on the Internet, where customers can book holidays online. The proposed 2,500 job cuts will affect both those who work in the back office and its retail network. The firm says it 195 outlets - many located on Britain's main shopping streets - are being considered for closure.

Chief Executive Peter Fankhauser says Thomas Cook owes it to customers to operate efficiently. The company says it is talking with unions and employee representatives to minimize the impact of the changes.