Confirming the industry’s worst fears, the box giant admitted that hopes of an early economic upturn have now been abandoned and frontline jobs are on the line.
The company is aiming to replace 170 of its 800 Danish seafarers with cheaper Asian crew and cut 113 of its 560 British officers through voluntary redundancies.
While the company has stressed that the lay-offs will be voluntary, the UK cuts are understood to be essential to stem the current surplus of officers out of work thanks to the increasing amount of vessels being laid-up.
The company, which posted a first half loss of nearly $1bn and expects that figure to reach$2bn by the end of the second half, has already “said goodbye” to around 7,000 employees worldwide over the past 18 months.
The possibility of further job cuts has not been ruled out.
“We just cannot carry on with a huge surplus of officers,” AP Moller Maersk head of marine human resources Henrik Sloth told Lloyd’s List. “We are doing this in the hope that there will be better times ahead soon, but we cannot live on hope alone”.
The Maersk fleet has been carrying surplus officers for several months in the hope of an economic upturn. On Friday, the company was forced to admit that their waiting had not paid off and the existing tranche of cost-cutting measures and efficiency savings were not going to be enough.
A total of 11 UK-flagged Maersk Line vessels are currently in lay-up and according to Mr Sloth the company conservatively estimates that 25 vessels across the fleet will join them by the end of the year.
Around 50 UK officers have already been transferred off the UK-flagged fleet into vessels less affected by the current downturn. But this programme has only dented the total surplus of officer that the company currently employs thanks to the increasing amount of lay-ups.
Without a significant upturn in economic activitiy the situation is expected to get worse before it gets better. Maersk currently has over 30 container vessels due to be delivered between now and 2012.
“The container industry is going through a tough period and with Maersk Line vessels laid-up, we simply cannot sustain surplus crew within a reduced fleet,” said Mearsk Company shipping division managing director Terry Cornick. “It’s not an easy decision to take, but it’s the right decision for the long-term future of our business.”
As part of the UK cuts, the Maersk Company has announced that it will also no longer automatically employ cadets graduating from training with the Company, although this decision is open to reviewas market conditions improve.
In Denmark Maersk Line will offer Danish officers with relatively low company seniority to take part in an early retirement and redundancy package. According to officlas the package will be attractive to officers with a desire to work in land based jobs and will be offered to all Danish officers in Maersk Line with relative low company seniority, excluding Captains and Chief Engineers.
Maersk started what promises to be a difficult round of negotiations with unions on Friday following the announcement.
“Of course this is very disappointing and we will be looking to negotiate the number of jobs down, but at this stage it really is a question of saving as many jobs and careers as possible,” said general secretary of officers union Nautilus International Mark Dickinson.