On Friday, global logistics giant Maersk announced massive layoffs in response to a “worsening price outlook” and “challenging market conditions.”
In a November 3 statement, Copenhagen-based Maersk revealed that 6,500 jobs have already been eliminated so far in 2023, and the company plans to cut 3,500 more jobs this year and into 2024.
The company points to overcapacity and weak market conditions as reasons for the layoffs.
Maersk also noted that “good performance in terminals and a stabilized logistics and services partly offset the continued pressure on prices in Ocean.”
“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.
Shares of Maersk were down 18% on Friday, reaching their lowest level since October 2020, according to 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.