Hundreds of staff could lose their jobs after TUI Travel, Europe’s biggest tour operator, today announced plans to close 100 high street travel agencies in the UK.

The group, formed in March last year by the £3 billion merger between First Choice and Thomson Holidays, said today that it wanted to increase cost savings by a further £50 million to £150 million a year.

It is already pressing on with the closure of offices in Crawley and Manchester as part of a wider reorganisation that could see thousands of jobs affected.

TUI Travel employs more than 18,000 staff in the UK out of 40,000 across Europe.

Peter Long, chief executive of TUI Travel, refused to quantify how many staff could be laid off as the operations of First Choice and Thomson are woven together.

“It’s not small numbers clearly and it’s a sensitive issue,” he said today. “We are very mindful that we want to work through this with our colleagues. We would hope to achieve a lot of this through natural staff turnover.”

Union leaders said they were seeking an urgent meeting and feared at least 1,000 jobs could go in the UK.

Gerry Doherty, general secretary of the Transport Salaried Staffs Association, said: "We warned last year that this merger would mean less choice for the consumer and job losses for our members. Sadly this has now come to pass."

Mr Long has carried out a 100-day review of the business to see where further cost savings, and investments, can be made.

TUI is the biggest tour operator in Europe and has made little secret of its ambition to expand into Russia, India and China.

Mr Long today said that the group should be able to increase operating margins from 2.2 per cent to 3.4 per cent and double its return on invested capital.

It has also signed a memorandum of understanding to merge TUIfly, its airline, with GermanWings, the carrier run by Lufthansa.

Mr Long today said that there was no sign that the slowdown hitting the high street would affect holiday bookings. Sales at TUI Travel for summer 2008 are up 8 per cent.

“Current trading is encouraging,” Mr Long said. “Our customers are cutting back on eating out and home improvement work instead. They are saying ‘My main holiday is an essential, we are not going to not go away’.”

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