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Maersk to Cut 10,000 Jobs as Shipping Demand Drops

One of the world’s largest shipping companies, Møller-Maersk, is cutting 10,000 jobs because of a drop in demand triggered by the global economic slowdown.

The Danish company said it had already started cutting staff but was planning on “intensifying” cost-saving measures in order to safeguard its financial performance as price forecasts worsened.

Maersk revealed on Friday that it had already axed 6,500 jobs this year, taking its headcount from 110,000 in early 2023 to 103,500 today.

It said it would increase those efforts, cutting another 2,500 jobs in the coming months, and a further 1,000 in 2024, in order to “cushion the impact of the challenging market conditions” and save at least $600,000 (£492,000) in annual costs.

Overall, Maersk said it hoped to shrink its global workforce by 10% to fewer than 100,000 positions.

The chief executive, Vincent Clerc, said the job cut part of efforts to adjust to a “new normal”, after shipping companies benefited from sky-high prices during the coronavirus pandemic, when supply chains were disrupted and demand for shipping soared.

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

A spokesperson for the company refused to provide further details on where the job cuts might fall across the 130 countries it operates in, including the UK. “We have no further comments at this point,” they said.

Maresk employees are the latest workers to be affected by the global economic slowdown, which follows a string of big shocks, including the pandemic, the war in Ukraine and a cost of living crisis that, for many countries, has involved inflation soaring to its highest level in 40 years.

Attempts to curb inflation through interest rate increases have subsequently dented consumer spending power across the US, Europe and Asia, forcing companies to tighten their belts and either curb hiring or cut existing jobs.

The overall slowdown forced the World Trade Organization to halve its forecast for global trade growth for 2023 last month, from 1.7% to only 0.8%. It said persistent inflation had kept interest rates higher for longer than expected in most trading nations, while a strained Chinese property market and the war in Ukraine had also cast a shadow over its outlook.

The Geneva-based body – which represents 164 member states – said the slowdown was broad-based, and reflected a drop in demand for goods including iron and steel, office and telecoms equipment, textiles and clothing.

Source : The Guardian