Maersk Line starts 2008 with massive job cuts
Maersk Line, the container shipping division of the A.P. Moller - Maersk Group, has revealed its new strategy to turnaround business will begin with the loss of between 2000 to 3000 jobs worldwide. The cull may represent a reduction of nearly 10% of its current 25,000 employees in a bid to return to sustainable profitability.
The Danish shipping giant claims the restructuring is necessary and will build on improved financial results seen in recent months. The core elements of the new strategy outlined by Maersk Line's head office in Copenhagen will be to fill ships with profitable cargo, provide a faster, more responsive service to customers, and crucially, reduce overall complexity and cost.
The first cost cutting exercise will be the reduction of the global organisation's workforce, which it aims to complete by April this year. This will principally affect regional organisations, which will be reduced into smaller teams through redundancies. In a statement released today the company announced bureaucracy in regional offices would be cut, and processes streamlined'.
"The reality is that a leaner and simpler business requires fewer people and this means there will be fewer positions in Maersk Line, mainly in the middle management layer," explained Eivind Kolding, CEO, Maersk Line.
In order for Maersk Line to concentrate on its core business of container shipping, container inland services (trucking, rail and stevedoring) and logistics activities (Maersk Logistics and Damco) will be separated from the Maersk Line organisation. Maersk Line's structure will also be reduced from 14 to 11 regions.
"Maersk Line has a strong ambition to reinforce its leading position in the market and to return to long-term profitability - this strategy will drive us towards these goals," said Kolding.
The new strategy is based on comprehensive analyses over the past six months of Maersk Line's entire organisation. A new management team has also been established to take responsibility for the delivery of the plan. "The new management team, which will drive the strategy, has the experience and proven ability to deliver results," added Kolding.
Nils Andersen, CEO of the shipping line's parent company, A.P. Moller - Maersk Group, has endorsed Maersk Line's new strategy. "The changes of Maersk Line follow our strategy of focus on customer needs and competitiveness. The new organisation will be more lean and effective and represents an important step forward towards improving the profitability of our business," said Andersen.
"We regret having to reduce our number of employees, but the redundancies will be done in a responsible manner," he added.
The A.P Moller - Maersk Group employs around 110,000 people across 130 countries. The Maersk Line container shipping division represents around 25,000 employees and operates a huge fleet of 550 container vessels, of which 220 are owned by the company.