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Image courtesy of Maersk Supply Service.

Maersk Supply Service will cut hundreds of jobs as it divests from as many as 20 vessels this year, citing an oversupply of offshore supply vessels.

Maersk Supply Service CEO Jørn Madsen told Splash 24/7 that the company will cut up to 20 offshore supply vessels from its legacy fleet over the next 18 months due to “unprecedented market conditions.”

The company expects that the first ten vessels will leave its fleet by the end of this year.

According to Energy Voice, the 20 vessels represent about one-third of the company’s fleet.

Maersk Supply added that it plans to flag four of its newbuilding Stingray vessels and five existing project vessels to the Isle of Man registry.

The company will also establish a commercial hub in the United Kingdom to consolidate ownership and operation of its project vessels.

Maersk expects to cut about 400 crew member positions as a result of the fleet cuts and flagging vessels to the Isle of Man, Splash said.

Further details about the cuts have not been disclosed yet.

Madsen told Splash that the majority of the divested vessels will either be recycled or modified by new owners to “compete outside of the OSV market.”

Maersk Supply Service reported a loss of $106 million in the second quarter of 2016 on $102 million in revenue, down from a profit of $64 million on $157 million in revenue during the prior year quarter.