Danish conglomerate A.P. Møller-Maersk announced on Wednesday that it is set to scale back its Maersk Line container-shipping operations as a way to adapt to a changing market and a quickly diminishing demand for the company's services. The shipping behemoth stated that the changes are part of a program that is aimed to "simplify the organization," according to The Wall Street Journal.
Due to the expected changes in the company's operations, the company's Maersk Line container-shipping unit is set to cut 4,000 jobs from its land-based staff of 23,000. Aside from the job cuts, the company has also cancelled six of its orders to buy Triple-E vessels, the largest container ships in the world. Additionally, its operating costs are also set to be cut by $250 million over the next two years.
"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," the company stated, according to The Telegraph.
Despite the stark decision, Maersk Line Chief Executive Søren Skou believes that the downsizing is simply a part of the company's evolution.
"We are in the process of transforming Maersk Line, to make the organisation simpler and leaner. We want to improve the online experience of clients and at the same time work as efficiently as possible," Skou said.
The changes were announced after the company issued a surprise profit warning last month, signaling that despite the company's prominence and dominance in the shipping industry, it was no longer immune to the lag in global growth and container ship overcapacity in a number of key routes.
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