A global economic slowdown, with a sharp drop in demand, could be behind AP Møller-Maersk’s decision to lay off an additional 3,500 people.
The Danish company, which owns the world’s second largest fleet, tells Port Strategy that layoffs have sadly been underway, as the firm looks to “intensifying” cost-saving measures.
“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 2023 so far, 6,500 jobs have been cut. After these trims are made, it is expected that the number of worldwide employees at Maersk will dip below 100,00. The company confirmed that 2,500 jobs will be cut in the coming months, and a further 1,000 in 2024.
“Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling,” Clerc adds.
Maersk also has seen a staggering drop in its share price, which is down more than 10% year over year, hurt by soaring costs, declining sales and fewer profits as shipping prices have fallen dramatically. The near future of logistics is murky at best, and that could deeply impact supply chains worldwide, according to financial experts.