Danish shipping giant Maersk is to cut 3,500 more jobs due to lower freight rates and demand.
The firm had already cut 6,500 roles earlier this year but now says further redundancies are needed, as profits have plunged by nearly $8.5bn (£6.9bn) in its most recent results with prices for shipping falling.
“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base,” said Maersk chief executive Vincent Clerc.
In the immediate aftermath of Covid, shipping had boomed as trade grew rapidly. But this trend has now reversed with high inflation, global instability and more cautious demand.
Redundancies
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“Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling,” added Clerc.
The costs of transporting a container have fallen by up to 90% in some cases. Last week Garry Grant, founder of The Entertainer toy company, said the cost of freight for the retailer’s goods was about $2,000 now compared with $18,000 a year ago.
Maersk’s job losses will reduce its global workforce to below 100,000. Some 2,500 of the latest 3,500 roles will be cut in the coming months, with the rest in 2024. It estimates that the redundancies will save the business £600m next year.
The company, which controls about one-sixth of global container trade, had already cut staff to about 103,500 from 110,000 earlier this year.
In the three months to September, Maersk’s pre-tax profits fell to $691m compared with $9.1bn in the same period last year. Sales dropped to $12.1bn from $22.7bn.
According to the company’s most recent gender pay gap report, Maersk has about 460 UK employees based in Maidenhead, Liverpool, Birmingham, Felixstowe and London, working in senior management operations, IT, sales, and customer support.
It is not yet known how many UK roles will be made redundant.
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