Maersk Line is to cut 4,000 shoreside staff positions, and will not be exercising options on eight newbuildings as it seeks to cut costs in a difficult market.
The Danish container line said that it would be reducing its shoreside staff of 23,000 worldwide by some 4,000 by the end of 2017.
Maersk Line said it aimed to minimize redundancies through “managing natural attrition”, but gave no figures on expected numbers, although Soren Skou, CEO of Maersk Line did say in media call that natural attrition could be quite large in orgnanisation of their size.
He added lay-offs would be worldwide with the company present in 116 countries. “We are fewer people today than a year ago. We will be fewer next year and the following year. These decisions are not taken lightly, but they are necessary steps to transform our industry,” Skou said in a statement.
The company is aiming to cut its Sales, General & Administration (SG&A) cost run-rate by $250m over the next two years with increased standardization and digitalization.
According to Skou, most this reduction will come from reducing the number of people employed and a “bit of reduction” in IT costs.
Maersk also announced it would not be taking up options for six second generation 19,630 TEU newbuildings and two 3,600 TEU feeder vessels. It will also postpone the decision on eight optional 14,000 TEU vessels.
“We are basically reacting to the fact market demand is signficantly weaker than was forecast just six months ago,” he said.
Over the next four quarters Skou said Maersk’s overall capacity will decrease slightly. The line is also cancelling a further 35 sailings in the fourth quarter on top of previously announced capacity cuts.
Two weeks ago Maersk announced it was cutting its 2015 full year profit forecast for its container line from $2.2bn to around $1.6bn.
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