“We are on a journey to transform Maersk Line. We will make the organization leaner and simpler,” Soren Skou, the Danish carrier’s CEO said.
Maersk said it plans to reduce its land-based global staff of 23,000 by at least 4,000 by the end of 2017 helped by an ongoing program of automation and digitalization.
“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.
Maersk said it expects to lower its annual sales and administration costs by $250 million, with $160 million in savings achieved in 2016.
The world’s largest carrier said it does not plan to exercise options for six 19,630 twenty-foot-equivalent unit capacity ships and two 3,600-TEU feeder vessels. It has postponed a decision on an option for eight 14,000-TEU ships.
Maersk will also reduce its network capacity in the fourth quarter of 2015 and through 2016 “as a response to the current market outlook.”
A further 35 sailings will be canceled in the fourth quarter following the closure of four services in the past two months.
“These initiatives will allow Maersk Line to deliver on the ambition to grow at least in line with the market (and) to defend the market-leading position,” the Copenhagen-based carrier said.
Today’s announcement comes two weeks after the Maersk Group slashed its 2015 profit outlook by 15 percent, or $600 million, citing the deteriorating global container shipping market.
The oil and shipping group now expects to post a full year underlying profit of $3.4 billion, down from a previous estimate of $4 billion. Maersk Line is expected to book a profit of around $1.6 billion, down from an earlier forecast of $2.2 billion.
Maersk will publish its third-quarter results Friday.
