Maersk to cut 10,000 jobs, sees weaker profit as shipping demand wanes
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Maersk is reducing its workforce from 110,000 to below 100,000, as it adjusts to its own “new normal”.
PHOTO: AFP
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COPENHAGEN – Shipping group AP Moller-Maersk on Friday reported a steep drop in profit and revenue in the third quarter, adding that it would cut 10,000 jobs as it battles with lower freight rates and subdued demand for container shipping.
The Danish company also kept its full-year guidance for revenue and operating profit but now expects both to land at the lower end of the range.
“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base,” chief executive Vincent Clerc said in a statement.
“Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling,” he said.
The group already warned in August of a steeper decline in global demand for shipping containers by sea in 2023 due to slow economic growth and destocking in the aftermath of the Covid-19 pandemic.
Maersk said it aims to cut its workforce from 110,000 in January 2023 to below 100,000, which will result in savings in 2024 of US$600 million (S$817 million) compared to 2023.
A one-time cost of US$350 million related to the restructuring would mostly impact its 2023 financial performance, it said.
The company said it expects underlying earnings before interest, tax, depreciation and amortisation (Ebitda) for 2023 at between US$9.5 billion and US$11 billion, while underlying earnings before interest and taxes are expected at between US$3.5 billion and US$5 billion.
Ebitda plunged to US$1.9 billion in the third quarter from US$10.9 billion a year earlier, slightly above analysts’ expectations of US$1.81 billion in a Refinitiv poll.
Revenues fell 47 per cent to US$12.1 billion. REUTERS
