The world’s largest container shipping company AP Moller-Maersk is cutting 10,000 jobs. The staff cuts represent a 9% reduction in headcount and are driven by lower freight rates and increased competition in maritime transport. About 6,500 of those positions have already been cut, CEO Vincent Clerk told Bloomberg TV.
After the job cuts were announced, the company’s Danish-listed shares sank 18% to their lowest level since 2020.
Maersk expects to save $600 million through the measures to cut labor costs, according to a company statement. The Danish company will also review its 2024 share buyback program and lower its forecast for capital spending in 2023 and 2024.
After two record years – 2021 and 2022 – container shipping companies are facing a sharp decline in profits after. Global economic growth has cooled this year, and companies are working with existing inventories rather than shipping new goods to Europe and the US. At the same time, there is an oversupply of vessels on the market.
Maersk’s earnings before interest, taxes, depreciation and amortization fell more than 80% to $1.88 billion in the third quarter, in line with analysts’ forecasts. Global container trade is likely to contract by 0.5% to 2% this year, Maersk forecasts.
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The European company operates one sixth of the world’s containers. Maersk has prepared for things to get worse by trying to lure many of its big customers into long-term contracts at a time when rates are higher.
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It is also the first regular air freight service between Denmark and Asia
In March, the Danish company announced that it was expanding its focus with the logistics company’s newest air cargo service, scheduled flights between Billund, Denmark and Hangzhou, China. The new service meets growing customer demand, the company said.
2023-11-03 14:20:11
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