World's Largest Container Carrier to Slice Workforce

Maersk, the container shipping division of the A.P. Moller -- Maersk Group, has announced that it will pare as many as 3,000 jobs from its global workforce. The move, which could involve as much as 12 percent of the company's 25,000 employees, will focus on decentralizing management into regional teams, and split its container operations into three different divisions in an effort to improve profitability. According to a Maersk press release, the long-term strategy is comprised of four core elements and will eventually simplify the company.

The January 8, 2008 announcement was short on real details, but instead said that the firm would, by reducing many mid-level management positions, drive the turnaround of the business and return to sustainable profitability. The move, said Maersk, “builds on the improved financial results and customer satisfaction seen in the recent months. The future will be a Maersk Line delivering a highly reliable service focused more closely on customers needs.”

The new Maersk strategy is based on four core elements, as follows:

  • Filling Maersk ships with profitable cargo;

  • Provide the most reliable product demanded by the customers;

  • Provide a faster, more responsive service closer to customers;

  • Reduce complexity and cost.

The main element of the plan will be to reduce regional organizations into smaller teams and push decision making out to the countries -- closer to the customers. Furthermore, a thorough process excellence project will reduce bureaucracy and streamline processes -- to the benefit of both customers and internal efficiency. According to Maersk, container inland services (trucking, rail, stevedoring, etc.) and logistics activities (Maersk Logistics and Damco) will be separated from the Maersk Line organization. Maersk Line’s structure will also be reduced from 14 to 11 regions to further simplify the global organization.

The Maersk press release goes on to say, “The reality is that a leaner and simpler business requires fewer people and this means there will be fewer positions in Maersk Line, mainly in the middle management layer.” The reorganization is expected to be completed by April 2008. A new management board, led by Maersk Line CEO Eivind Kolding, will assume daily management responsibilities within the company, as follows:

  • Eivind Kolding, Chief Executive Officer

  • Hanne B. Sørensen, Chief Commercial Officer

  • Michel Deleuran, Head of Network & Product

  • Morten Engelstoft, Chief Operating Officer

  • Søren Laungaard, Chief Process Officer and Head of Customer Service

  • Peter Rønnest Andersen, Chief Financial Officer

  • William S. Allen, Head of Human Resources