Last Friday, the well-known global logistics company, Maersk, made a significant workforce reduction announcement due to a deteriorating financial outlook and difficult market circumstances.
In a press release issued on November 3, the Denmark-based Maersk disclosed that they have already terminated 6,500 positions in 2023, with intentions to eliminate an additional 3,500 jobs throughout the remainder of this year and into 2024.
The company attributes these job cuts to excessive capacity in the industry and unfavorable market conditions.
Additionally, Maersk acknowledged that while they’ve seen positive results in their terminals and experienced some stability in their logistics and services, these gains have only partially offset the ongoing downward pressure on ocean freight prices.
“Maersk has imposed rigorous cost containment measures during the year to effectively cushion the impact of the challenging market conditions, including headcount reduction from 110,000 early 2023 to around 103,500 today. Given the worsening price outlook in Ocean, Maersk is intensifying those measures and today introduce plans to further decrease the workforce by 3,500 positions, with up to 2,500 to be carried out in the coming months and the remaining to extend into 2024,” the company said.
On Friday, Maersk’s stock took a significant hit, plummeting by 18%. This decline brought their shares to their lowest point since October 2020, as reported by CNBC.
“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base. Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling. Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance. While continuously streamlining our organization and operations, we remain dedicated to our strategy of fulfilling our customers’ diversified supply chain needs while pursuing growth opportunities across our Terminals business and Logistic & Services,” said Vincent Clerc, CEO of Maersk.
