The measures will bring the organisation into line with the reduced capacity the company will be operating as a result of initiatives announced last month. The capacity reductions will cut the NOL Group's vessel network costs by about US$200 million in 2009.
NOL said it did not see a recovery from the challenging conditions for quite some time, and the potential exists for them to persist for the next few years. The market environment has deteriorated considerably over the past month, and NOL anticipates this to continue.
NOL describes the outlook for profitability in 2009 as grim, and has therefore decided on a number of additional actions:
- A continuing strong focus on productivity measures and reducing operating costs as well as overhead costs
- A reduction of the group's global workforce of about 1,000 positions, primarily in North America where the company's cost base is highest
- The relocation of the group's Americas' regional HQ from Oakland, California to a more cost effective location elsewhere in the US - the location and time frame for transition to the premises will be announced in December.
- Additional business adjustments in Europe and across the company's Asian regions, with a reduction of about fifty staff positions at the company's Singapore office.
- Changes in the way the APL Logistics business is managed to create efficiencies and clearer line of sight of roles and accountabilities.
NOL is committed to providing a range of support and assistance services for affected employees.
Group president & CEO Ron Widdows said: "The negative conditions we are seeing in the market place are unprecedented in our industry's history. This necessitates these very difficult decisions."
He said that NOL initiated capacity reductions last month that will significantly reduce the group's vessel network and operating costs, but in view of the deteriorating market conditions, these additional steps will be taken.
"This reflects our considered view that what we are seeing goes beyond a normal cyclical downturn," he said. "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." concluded Mr Widdows.
