Struggling UK tour operator MyTravel plans to cut at least 1,300 jobs worldwide over the next two years as it struggles with the downturn in the holiday market.

MyTravel, whose brands include the Going Places chain, has about 15,000 of its 27,000-strong workforce in the UK. It announced plans for 700 UK jobs cuts in February but it is unclear whether this latest round of job cuts includes those redundancies.

The company's new management team won an extension in November to a key £250m credit facility until to the end of this year, while it worked on a long-term recovery plan. But the conflict in Iraq has complicated its recovery effort as potential customers delay travel plans until the uncertainty is over. At MyTravel's annual meeting in Manchester two weeks ago, Peter McHugh, chief executive, confirmed that bookings had deteriorated in recent weeks. But he added that summer demand was still better than a year earlier and that capacity cuts had helped the business cope with the downturn.

Mr McHugh, who took over from Tim Byrne at the end of last year, pointed out that rapid expansion in the last decade had left the company with high fixed costs - a problem that reduced its flexibility in the current downturn.

The group reported annual losses of £72.8m because of the impact of the September 11 terrorist attacks and accounting problems that forced it to sharply revise its losses. MyTravel shares have slumped from 283.5p to 10p as a result of its problems.

All tour operators have suffered from the global economic downturn and a drop in tourism following the September 2001 attacks, but MyTravel has suffered worse than others.