Hundreds of regional staff at global container shipping firm Maersk face uncertainty after it announced plans to axe 3,000 jobs.
The Danish line, the world’s largest with 16 per cent of the market, announced a full-scale restructuring last week to reduce internal complexity and return it to profitability.
The firm, which has more than 2,000 staff in the Gulf, said it would be reducing its 25,000-container division workforce by between 2,000 to 3,000 employees. A decision on where the jobs will be lost is expected to be announced next month.
Marc Gijsbrechts, CEO of Maerk’s Middle East operations, told Emirates Business: “We are currently making a full review on the number of employees to be laid off and in which sectors. Within the next 15 to 30 days we will be in a position to determine which jobs will go and their impact on us.”
He said some offices would be scaled down, although the day-to-day dealings with their customers would not be affected.
“The Gulf region remains an integral part of Maersk’s global network. The new strategy is only aimed at giving Maersk a more efficient structure and has nothing to do with ship deployments or service levels,” said Gijsbrechts, who is to be replaced by a new Middle East CEO next month.
Speculation is rife that Maersk’s regional offices will suffer many of the job losses, including Maersk’s offices in Dubai and the Port of Salalah in Oman.
Maersk dominates shipping in the Gulf, carrying more than 30 per cent of the seaborne trade, and has offices in every Gulf state for more than 40 years. It handles shipping for Dubai Aluminium Company.
In a bid to return to profit, management at Maersk last week unveiled a four-point plan – fill ships with profitable cargo; provide the most reliable product; provide faster, more responsive service; reduce complexity and cost.
Maersk Line CEO Eivind Kolding said the firm’s priority was to reinforce its leading position in the market and return to long-term profitability. The new strategy would drive it towards those goals.
“The reality is that a leaner and simpler business requires fewer people and this means there will be fewer positions… Maersk Line will be customer-focused and highly competitive,” he said. Its structure would also be reduced from 14 regions to 11 to simplify the global organisation.
Maersk’s container shipping division, which has 550 container vessels, posted a $902 million (Dh3.3 billion) loss in the nine months to September 2006, though it managed to eke out a small profit, $32.3m (Dh119m), in the same period last year.
The Middle East accounted for 10 per cent of the containers transported by Maersk in 2006. Maersk Middle East is now targeting further growth in the coming years and aims to be a one million 40-foot equivalent area by 2009. If targets are achieved, Maersk Middle East alone will handle the same volume that the Maersk Line handled globally 10 years ago.