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Maersk Line to lay off 2,000-3,000 workers

Copenhagen, January 8, 2008

Danish shipping and oil group AP Moller-Maersk said its container shipping unit Maersk Line would lay off between 2,000 and 3,000 workers as part of a new strategy to return to long-term profitability.

That is around 10 percent of the unit's 25,000 employees.

To concentrate on the core business of container shipping,  Maersk will separate container inland services and logistics activities from Maersk Line, the world's largest container shipping operator.

Maersk Line will also simplify its global organization, reducing it to 11 geographical areas from the current 14.

"The new organization will be more lean and effective and represents an important step forward towards improving the profitability of our business," AP Moller-Maersk chief executive Nils Smedegaard Andersen said in a statement.

Maersk Line saw its share of the world container market capacity slip from above 18 percent to below 17 percent last year. It forecast a small full-year net profit for 2007 after a loss in the first half of the year.

"The layoffs are lower than anticipated. But on their own the layoffs will not bring Maersk Line to safe ground. They need to shape up their structure and processes," Jyske Bank analyst Michael Nielsenhe said.

The reorganisation is expected to be completed by April this year. The company vowed to fill its ships with more profitable cargo, to provide a faster and more reliable service and to reduce complexity and costs.

"Maersk Line has a strong ambition to reinforce its leading position in the market and to return to long-term profitability," unit chief executive Eivind Kolding said in a statement.

By 1021 GMT, Maersk shares traded up 1.2 percent at 50,200 crowns, while the Copenhagen exchange top-20 index was up 0.8 percent. - Reuters




Tags: shipping | Maersk Line |

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