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By Marcus Hand in Jakarta - Wednesday 19 November 2008
NEPTUNE Orient Lines is axing close to one tenth of its workforce as it describes the outlook for 2009 as “grim” with a prolonged downturn expected.Singapore-headquartered NOL said that in an effort to save costs it was cutting 1,000 jobs, mainly in North America, out of a total global workforce of around 11,000.The company said that the largest impact would be in North America where its cost base is highest. NOL also plans to shift its regional headquarters in North America from Oakland, California, “to a more cost effective location elsewhere in the United States.”It said that the new location and the planned move would be announced in December.There will also be staff cuts in Europe and Asia with around 50 staff losing their jobs at its Singapore headquarters.Most of the lay-offs will be made in what were described “as non-customer facing positions”.“The negative conditions we are seeing in the market place are unprecedented in our industry’s history. This necessitates these very difficult decisions,” said Ron Widdows, NOL president and chief executive.The company described the prospects for profitability in 2009 as “grim” and believes that the sharp market downturn seen over the last 12 months could last for several years.In October NOL announced it was reducing its containership capacity by up to 25% on some trades, laying-up vessels and returning ships to charterers, in an effort to save $200m in operating costs. At the time it also said there would be redundancies but gave no details.“Last month, we initiated capacity reductions which will significantly reduce our vessel network and operating costs. Now, in view of the deteriorating market conditions, we take these additional steps.“This reflects our considered view that what we are seeing goes beyond a normal cyclical downturn,” Mr Widdows said.The move will result in a $33m restructuring charge on NOL’s fourth quarter results and it expects to make further charges in 2009.Last month NOL reported a third quarter net profit of $35m, 82% lower than the corresponding period last year, and warned that it expected an operating loss in the fourth quarter, its first since the fourth quarter of 2002.“Our aim is to ensure a viable future, to shape the company to handle the turbulence ahead and to be positioned for success when the global economy recovers,” Mr Widdows explained.Earlier this month AP Moller-Maersk announced it was cutting 700 jobs in China by mid-2009, closing down two customer service centres.
NEPTUNE Orient Lines is axing close to one tenth of its workforce as it describes the outlook for 2009 as “grim” with a prolonged downturn expected.Singapore-headquartered NOL said that in an effort to save costs it was cutting 1,000 jobs, mainly in North America, out of a total global workforce of around 11,000.The company said that the largest impact would be in North America where its cost base is highest. NOL also plans to shift its regional headquarters in North America from Oakland, California, “to a more cost effective location elsewhere in the United States.”It said that the new location and the planned move would be announced in December.There will also be staff cuts in Europe and Asia with around 50 staff losing their jobs at its Singapore headquarters.Most of the lay-offs will be made in what were described “as non-customer facing positions”.“The negative conditions we are seeing in the market place are unprecedented in our industry’s history. This necessitates these very difficult decisions,” said Ron Widdows, NOL president and chief executive.The company described the prospects for profitability in 2009 as “grim” and believes that the sharp market downturn seen over the last 12 months could last for several years.In October NOL announced it was reducing its containership capacity by up to 25% on some trades, laying-up vessels and returning ships to charterers, in an effort to save $200m in operating costs. At the time it also said there would be redundancies but gave no details.“Last month, we initiated capacity reductions which will significantly reduce our vessel network and operating costs. Now, in view of the deteriorating market conditions, we take these additional steps.“This reflects our considered view that what we are seeing goes beyond a normal cyclical downturn,” Mr Widdows said.The move will result in a $33m restructuring charge on NOL’s fourth quarter results and it expects to make further charges in 2009.Last month NOL reported a third quarter net profit of $35m, 82% lower than the corresponding period last year, and warned that it expected an operating loss in the fourth quarter, its first since the fourth quarter of 2002.“Our aim is to ensure a viable future, to shape the company to handle the turbulence ahead and to be positioned for success when the global economy recovers,” Mr Widdows explained.Earlier this month AP Moller-Maersk announced it was cutting 700 jobs in China by mid-2009, closing down two customer service centres.
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