Shipping giant Maersk swings the job axe
The Danish shipping company Maersk is planning to cut thousands of jobs due to lower freight rates and weak demand for containers. Of the 110,000 jobs worldwide, a total of 10,000 are to be cut, the company announced. This will lead to savings of 600 million dollars next year.
"Our industry is facing a new normal characterized by subdued demand, lower prices and inflationary pressures," said Group CEO Vincent Clerc. In the third quarter, the world's second-largest container shipping company after Switzerland's MSC felt the effects of the weak economy. As freight rates fell sharply after the record levels of the previous coronavirus years, earnings before interest, taxes, depreciation and amortization (EBITDA) slumped to 1.9 billion dollars from 10.9 billion a year ago. Turnover fell by 47 percent to 12.1 billion dollars.
"Since the summer, we have seen overcapacity in most regions, which has led to a drop in prices," explained Clerc. The restructuring will mainly result in one-off costs of 350 million dollars this year. The Danish shipping company had already warned in August of a sharp decline in demand for containers due to the economic downturn and the reduction in customer inventories.
The Danes therefore expect a subdued business environment for the next two to three years. This year, global container trade will decline by between 0.5 and 2 percent. This is slightly better than previous forecasts, in which Maersk had predicted a decline of up to four percent. Nevertheless, Maersk felt the effects of the gloomy industry environment in the past quarter and is therefore more pessimistic about the targets it has set itself for the year.
Nevertheless, Maersk is sticking to its annual EBITDA forecast. However, the Danish company is now aiming for the lower end of the previously communicated range of between 9.5 and 11 billion dollars. The shares lost around nine percent of their value on the Copenhagen Stock Exchange.
Despite the challenges in the industry, Maersk continues to operate its extensive container ship fleet for global trade. In light of the job reductions, the company may need to optimize its shipping routes and container ship utilization to maintain profitability.
Source: www.ntv.de
