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Denmark’s Maersk to slash 3,500 jobs as revenues plunge

Danish shipping giant Maersk said on Friday it would slash 3,500 jobs as net profit and revenue plunged in the third quarter due to a sharp fall in freight rates.

Published: 3 November 2023 09:26 CET
Denmark's Maersk to slash 3,500 jobs as revenues plunge
Maersk HQ in Copenhagen. The freight giant is to cut thousands of jobs globally. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Maersk’s net profit nosedived to $521 million between July and September against $8.9 billion a year earlier.

“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base,” CEO
Vincent Clerc said.

The company had already begun to cut costs, reducing staff levels from 110,000 at the start of 2023 “to around 103,500 today.”

“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.

“This will reduce the global workforce to below 100,000 positions,” it added.

Revenue for the period fell to $12.1 billion, compared to $22.8 billion a year earlier, especially in its shipping business.

“Ocean results have reached break-even levels due to continuing challenging market conditions resulting in substantially lower freight rates compared to the abnormally high rates in 2022,” the company said in its quarterly earnings report.

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BUSINESS

Maersk profits plummet as Yemeni attacks close off Red Sea route

Danish shipping giant Maersk posted a huge drop in net profit for the first quarter on Thursday as Yemeni rebel attacks are forcing it to avoid the vital Red Sea route.

Published: 2 May 2024 10:06 CEST
Maersk profits plummet as Yemeni attacks close off Red Sea route

Maersk reported a net profit of $177 million in the first three months of the year, a 13-fold drop from the same period last year. Turnover fell 13 percent to $12.4 billion, slightly lower than forecast by analysts surveyed by financial data firm FactSet.

The company, however, raised its outlook for the full year, citing higher demand and increased rates and costs due to the supply chain disruptions in the Red Sea.

It now expects an underlying core profit ranging between $4 billion and $6 billion, up from $1 billion-$6 billion previously.

“We had a positive start to the year with a first quarter developing precisely as we expected,” Maersk chief executive Vincent Clerc said in a statement.

“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched,” he said.

“This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.”

Iran-backed Huthi rebels, who control the Yemeni capital Sanaa and much of the country’s Red Sea coast, have launched dozens of attacks on ships since November, claiming solidarity with Palestinians caught up in the Israel-Hamas war.

The United States in December announced a maritime security initiative to protect Red Sea shipping from the attacks, which have forced commercial vessels to divert from the route that normally carries 12 percent of global trade.

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