NOL cutting 1,000 jobs, relocating Oakland office
Neptune Orient Lines Ltd., the Singapore-based parent company of container shipping line APL and APL Logistics, said it will slash its workforce by 1,000 — mostly in the United States — and relocate its regional headquarters in Oakland, Calif., to a “more cost effective location elsewhere in the United States.”
“The negative conditions we are seeing in the marketplace are unprecedented in our industry’s history,” said Ron Widdows, NOL Group president and chief executive officer. “This necessitates these very difficult decisions.”
NOL said it believed the steps will “place the company on a more sustainable footing through an expected severe and prolonged downturn in global container shipping.”
APL has about 11,000 employees globally including 3,400 in the United States and another 1,200 in other parts of North America. About 344 work in Oakland at the company headquarters and another 58 at its terminal in Oakland.
APL said the decision on where to move the Oakland headquarters would be announced in December.
NOL said it would also make additional business adjustments in Europe and in Asia. Fifty jobs will be cut at the company’s Singapore office.
“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,” Widdows said.
The company said the bulk of the staff reductions would be in “non-customer facing roles, reflecting the group’s ongoing commitment to delivering high quality services to customers.”
NOL said it would provide “a range of support and assistance services for affected employees.”
Widdows said the company is expected to take a restructuring charge of about $33 million in the fourth quarter, but still report a profit for the year. Further charges against earnings are anticipated in 2009.
At its APL Logistics business, the company said changes would be made “to create efficiencies and clearer line of sight of roles and accountabilities.”
APL said the actions to be taken will bring its workforce into line with reduced capacity. Last month the company said it would reduce capacity between Asia and Europe by 25 percent and on the transpacific by 20 percent.
The company has a fleet of about 130 ships. It has begun the process of laying up about 20 vessels.
The company added 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 worsened considerably over the past month and that it anticipated further deterioration in trading conditions going forward,” it said.
The outlook for profitability in 2009 is “grim,” it added. ' Chris Dupin