Mearsk will lay off more than 10 thousand people
AP Møller-Maersk, the world’s second largest shipping company, plans to lay off at least 10,000 people due to weakening demand during the economic crisis.
Maersk’s statement noted that cost cuts accelerated as the global cost of living crisis became even more severe.
Maersk CEO Vincent Clerc said that despite their goal to expand their assets, they had to make significant layoffs, including in the logistics business.
Clerc said that as part of the reduction, Maersk has already laid off 6,500 workers and that all offices globally have been affected by the cost-cutting measures.
The company announced that it will reduce the number of employees from 110,000 in January to less than 100,000, allowing for annual savings of $600 million.
“We had to hire a lot of colleagues during the pandemic, but now we don’t need the same workforce,” Clerc said. “We don’t think this is over yet, and that’s why we’re taking some pretty radical steps to make sure we’re in the best situation possible no matter what.”
THE VISION HAS GOT EVEN WORSE
Shipping companies made record profits during the Covid-19 period, when spending on online purchases increased and supply constraints caused by port congestion increased shipping costs.
Following record profits, scrutiny on the sector has increased and shipowners are facing pressure to invest in decarbonisation. Companies’ profits have plummeted as authorities tighten controls on shipping, which was previously difficult to regulate due to its international nature.
Maersk said its pre-tax profits fell 94 percent year-on-year to $691 million in the three months to September, but profits remained above pre-pandemic levels.
Container shipping companies had warned that this year would be much more challenging, but the outlook has only worsened.
The company warned that next year “a long list of geopolitical tensions, ranging from a slowdown in the global economy, strained relations between China and the United States to wars in Ukraine and the Middle East, could offset the expected improvements.”