Maersk to cut 3,500 jobs following a significant decline in net profit

Danish shipping powerhouse Maersk announced its plans to cut 3,500 jobs, following a significant decline in net profit and revenue during the third quarter, primarily attributed to a sharp drop in freight rates.

In the period from July to September, Maersk’s net profit plummeted to $521 million, a stark contrast to the $8.9 billion it reported a year earlier. CEO Vincent Clerc said, “Our industry is now contending with a new normal characterized by subdued demand, prices returning to historical levels, and escalating cost pressures due to inflation.”

The company had already initiated cost-cutting measures, resulting in a reduction of staff levels from 110,000 at the beginning of 2023 to approximately 103,500 as of today.

Maersk is now intensifying these efforts and has unveiled plans to further reduce its workforce by 3,500 positions, with up to 2,500 of these cuts to be implemented in the coming months, while the remainder will extend into 2024. As a result, the company will see its global workforce reduced to below 100,000 positions.

During this challenging period, revenue for the quarter declined to $12.1 billion, down from $22.8 billion in the previous year, particularly impacting its shipping business. In its quarterly earnings report, the company noted that the ocean-related results had reached break-even levels due to the ongoing tough market conditions, leading to significantly lower freight rates compared to the abnormally high rates experienced in 2022.