Maersk Line is preparing to axe from 2,000 to 3,000 employees, about 10 percent of its total workforce, under a new 'Streamline' strategy unveiled by Chief Executive Officer Eivind Kolding Tuesday.
The cutbacks are the largest in A.P. Moller - Maersk Group's history, topping the loss of 1,500 jobs after its acquisition of P&O Nedlloyd in late 2005.
Kolding said the latest redundancies, were unfortunate but a necessary decision in order to reverse the fortunes of the world's largest container line that lost $568 million in 2006.
Under the new strategy, details of which found their way to the press in December, Maersk Line will focus on its core container shipping business by cutting ties with other activities such as logistics, trucking and rail. Maersk Line's sister company Safmarine Container Lines will continue as normal.
The company said key elements of the new strategy are to increase vessel utilization and in particular target more profitable cargo, as well as simplifying processes so that it is more responsive to customer needs.
The new direction will also see Maersk's regional structure trimmed from 14 to 11 areas and will result in the mergers of its Northeast Asia (Japan and Korea) region with Greater China, Oceania with Southeast Asia, and the Nordic (Scandinavia and Russia) region with the United Kingdom.
Kolding said the company's sales force will remain intact and will be given more authority to make immediate decisions rather than having to wait for approval from above.
New A.P. Moller - Maersk Group CEO, Nils S. Andersen said: “The changes of Maersk Line follow our strategy of focus on customer needs and competitiveness. The new organization will be more lean and effective and represents an important step forward towards improving the profitability of our business. We regret having to reduce our number of employees, but consistent with our group values, the redundancies will be done in a responsible manner.”
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