DFDS, the ferry and logistics company, announced a series of steps designed to improve operating efficiency in light of current market conditions including a nearly 10 percent reduction in its current workforce.

“Our initial response to Covid-19 has been successful,” said Torben Carlsen, CEO of DFDS. “We now take further steps to restore long term growth and efficiency. At the same time, we continue to monitor new opportunities that may arise.”

Among the steps that DFDS announced that it will be undertaking to adapt to new market conditions will be a combining of its sales of large freight customer solutions, involving both ferry and logistics operations, into the logistic division to drive sales across the DFDS organization. Overlapping functions will be streamlined as part of the consolidation.

DFDS’s ferry division will now focus on delivering services to freight forwarders and haulers while the freight and logistics operations will be adapted to new market conditions, including optimization of port terminal and haulage operations. Further, initiatives are also underway to simplify and focus business support functions, including reshaping and integrating the IT and digital organization as well as a downsizing of various functions.

The company’s passenger operations have also been aligned with changes in the travel market. A higher share of passengers are traveling for transportation purposes, including holiday travel. The changes include simplifying the onboard concepts and offerings on the ferries.

As a result of the planned actions, DFDS says approximately 650 of its 8,600 employees will be leaving in the coming months, including 200 in Denmark. It will record a one-time expense of approximately $15 million in 2020 but expects to realize a positive financial impact of between $7 and $11 million in 2020 and an annualized cost savings of approximately $38 million.

Responding to the outbreak of COVID-19, in mid-March, DFDS had reduced costs by laying up 12 freight ferries and suspending two passenger routes. The company reported that freight volumes in the second quarter have in most areas been above expectations and as a result five of the ferries have been reactivated.

In its passenger operations, DFDS reopened its Oslo-Frederikshavn-Copenhagen route on June 25, after Denmark and Norway reopened their borders. The resumption of the second passenger route, Amsterdam-Newcastle, and the non-essential travel on the English Channel is contingent on an easing of UK and EU travel restrictions.

DFDS said that uncertainty remains exceptionally high, particularly for passenger travel. As a result, it is maintaining its lowered estimates for earnings and noted that market conditions may still cause the outlook, and its assumptions to change significantly in the second half of the year.