Maersk to axe 2,000-3,000 jobs

Maersk Line has revealed plans to cut some 2,000-3,000 positions in hopes of returning to profitability.

The company said it plans to reduce the strength of its workforce from its current 25,000 to reduce complexity and cost, one of the four plans in Maersk Line's strategy to turn the business around.

"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," said Eivind Kolding, CEO of Maersk Line.

Nils S. Anderson, CEO of parent company AP Moller - Maersk Group said the layoffs represent an important step forward toward improving the profitability of the 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," he said.

In an email interview with Procurement magazine, Jesper Praestensgaard, CEO for Maersk SEA said all positions in Singapore and the region will be under scrutiny.

"It is still in the early stages and as such we prefer not to speculate. We can however confirm that all positions will be looked will be looked at during the recruitment process in the first quarter of 2008.

"Employees will have the chance to influence their own future and make decisions for themselves from there, including employees in south east Asia," he said.

Apart from reducing complexity and cost, the other three core ways in Maersk's strategy are: Filling ships with profitable cargo, providing the most reliable product demanded by customers and providing faster, more responsive service closer to customers.

In addition, Maersk Line will concentrate on its core business of container shipping and as such its container inland services (trucking, rail, stevedoring etc.) 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 to further simplify the global organisation, the company said.

A new management team has been established to take responsibility for the delivery of the strategy. The board will be filled as follows:

• Eivind Kolding, Chief Executive Officer
• Hanne B. Sørensen, Chief Commercial Officer
• Michel Deleuran, Head of Network & Product
• Morten Engelstoft, Chief Operating Officer
• Søren Laungaard, Chief Process Officer and Head of Customer Service
• Peter Rønnest Andersen, Chief Financial Officer
• William S. Allen, Head of Human Resources