Maersk is laying off 10,000 workers due to issues such as overcapacity, rising costs, and declining prices. The decision comes as the shipping conglomerate’s third-quarter earnings and sales fell.
The move is part of a larger cost-cutting strategy that aims to reduce the workforce from 1,10,000 employees in January to under 1,000. This change is expected to save $600 million in costs next year compared to the current year.
Maersk manages roughly one-sixth of global container trade and ships products for major retailers and consumer goods companies such as Walmart and Nike. The company reported a more pronounced decline in demand than analysts and investors expected.
Maersk also intends to increase its cost-cutting measures in response to the escalating global cost-of-living crisis. The company had previously warned that this year would be more difficult, but the situation has since deteriorated.
Maersk CEO Vincent Clerc stated in a media statement that their industry is experiencing a new normal characterised by subdued demand and increased cost pressures due to inflation.
Maersk, officially known as AP Moller-Maersk, is a Danish shipping and logistics conglomerate founded in 1904. The company is well-known in the global container shipping industry, having transported goods for major retailers and consumer brands.
It operates a large fleet of vessels, terminals, and logistics services in industries other than shipping, such as oil and gas production.