SINGAPORE - Danish conglomerate A.P. Moeller-Maersk is laying off at least 4,000 staff across its container shipping unit by the end of 2017 and downsize capacity amid the downturn in the industry.
It announced in a statement on Wednesday (Nov 4) that Maersk Line, the world's biggest container shipping line, will reduce its network capacity and postpone investments in new capacity, while reducing operating costs by escalating already announced plans to "simplify the organisation".
The unit employs 23,000 land-based staff globally.
"In light of the lower demand, these initiatives will allow Maersk Line to deliver on the ambition to grow at least in line with the market to defend the market leading position," said the company, which last month posted a profit warning for the full year, citing a gloomier outlook for the global shipping market.
"We are on a journey to transform Maersk Line. We will make the organisation leaner and simpler," said Maersk Line chief executive 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.
Maersk said that as a response to the current market outlook, network capacity will be reduced in the fourth quarter this year and throughout next year.
It noted that four services have already been closed over the last two months, as previously announced, and plans are in place to further cancel a total of 35 sailings in the fourth quarter. The drop in global demand, little helped by overcapacity in the industry, has continued to rack shipping companies worldwide.
Singapore's Neptune Orient Lines (NOL) last month posted a wider net loss of US$96.1 million (S$134 million), or by a whopping 84 per cent, for the third quarter.
The loss-making firm had made waves in July when a Wall Street Journal report, citing unnamed sources, said that state investment firm Temasek Holdings, a majority shareholder, has put it up for sale.
NOL president and group chief executive Ng Yat Chung later said he is not ruling out the possibility of selling the firm.