Maersk is laying off 10,000 employees as the company faces issues such as overcapacity, increasing expenses, and declining prices. The decision comes as the shipping conglomerate saw a dip in its third-quarter earnings and sales.
The move is a part of its broader cost-cutting strategy as it aims to bring down the workforce from 1,10,000 employees in January to below 1,00,000. This move is expected to yield cost savings of $600 million next year compared to the current year.
Maersk oversees approximately one-sixth of worldwide container trade and handles the shipment of products for prominent retailers and consumer goods firms such as Walmart and Nike. The company indicated a more pronounced decline in demand than what analysts and investors had anticipated.
The decision also comes as Maersk aims to increase its cost-cutting measures due to the escalating global cost-of- living crisis. The company previously cautioned that this year would be more challenging, but the situation has since worsened.
In a media statement, Vincent Clerc, CEO, Maersk, noted 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, with a history dating back to 1904. The company has a significant presence in the global container shipping industry, transporting goods for major retailers and consumer brands.
It operates an extensive fleet of vessels, terminals, and logistics services, encompassing various sectors beyond shipping, including oil and gas production.