COPENHAGEN: In a bid to cut costs, Maersk Line is to reduce the number of its employees from 23,000 to 17,000 over the next two years and has cancelled options for six 19,630 TEU vessels and two 3,600 TEU feeders.
The company said lower market demand has prompted the move that will include a reduction in the cost of annual sales, general and administration by US$250 million by the end of 2017 with US$150 million savings projected next year.
The company will also postpone a decision on options for eight 14,000 TEU vessels in response "to both the short term and long term market outlook", and reduce network capacity in Q4 2015 and throughout 2016.
In the past two months Maersk began cancelling four services (ME5, AE9, AE3 and TA4) and plans to cut a further 35 sailings by the end of this year in a bid to defend its market position.
"We are on a journey to transform Maersk Line. We will make the organization leaner and simpler. We want to improve our customer experience digitally and at the same time work as efficiently as possible," said CEO Søren Skou.
"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," he added.