Maersk cutting at least 10,000 jobs as shipping boom unravels

Monday, 22 April 2024

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COPENHAGEN, Nov 3 (Reuters) - Shipping group A.P. Moller-Maersk (MAERSKb.CO), opens new tab, reported a steep drop in third-quarter profit and revenue on Friday and said it would cut at least 10,000 jobs in the face of overcapacity, rising costs and weaker prices, sending its shares tumbling.
Maersk, which controls about one-sixth of global container trade, transporting goods for a host of major retailers and consumer goods companies such as Walmart and Nike, flagged a steeper downturn in demand than analysts and investors had expected.

"The new normal we are now headed into is one of more subdued macroeconomic outlook, and thus soft volume demands for the coming years, prices back in line with historical levels, inflationary pressures on our cost base, especially from energy cost, and also increased geopolitical uncertainty," CEO Vincent Clerc said on an investor call.
The industry invested heavily in new container ships during and after the pandemic to meet strong demand and benefit from record freight rates. A large number of new ships entered the market since the summer with no signs of idling or scrapping, said Clerc.
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"If the fourth quarter does not deliver some type of improvements, then I think we're looking at a pretty dire situation in 2024," he said.
Negative revenue growth in the third quarter came mainly from the retail and lifestyle sector, especially in North America, as well as automotive and technology, Clerc said.

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