Maersk Cutting 12% of Jobs Related to Oil

A.P. Moeller-Maersk is planning to cut up to 12% of its global workforce in its oil unit amidst the lower prices of crude that have remained at lows for the past year.

The job cutting move is an attempt to help Maersk Oil fulfill its goal of cutting its expense by at least 20% by 2016 year end, and brings the number of cut jobs in 2015 to 1,250, said the company in a statement emailed to the media on Monday.

Jakob Thomasen the CEO at Maersk Oil said the company expects the pressure will continue into next year and the company must keep cost-focused to grow in the market.

This decision follows Maerskā€™s move last week to lower its profit outlook as the company is facing headwinds in its container shipping market.

The group said that its see is underlying profit for 2015 of $3.4 billion, versus its forecast released earlier of $4 billion.

Maersk shares were up following the announcement by up to 2.9%. Its stock was 2.7% higher early on Monday, but shares lost 5.2% last Friday after the profit warning was announced by the company.

Maersk Oil during September cut over $1 billion from the annual budget for its capital expenditures. The unit is looking for acquisitions to expand the dwindling output, said Nils Smedegaard Andersen its group CEO last week.

The unit previously had announced job cuts of 220 across the UK that were related the retiring of its Janice Field, and 60 others in Angola and the United States related to its project in Chissonga.

Both the round of job cuts are part of the announcement made on Monday, said Maersk officials.

The prolonged drop in oil prices has had a rippling effect across the entire industry in both companies that are directly and indirectly involved with the industry.