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AP Møller-Maersk has said it plans to cut at least 10,000 jobs as the pandemic-driven container shipping boom gives way to weaker demand and overcapacity.
Container shipping lines had already warned that this year would be much tougher, but Maersk said on Friday that the picture had deteriorated and cost savings were being stepped up.
The Danish group said it wants to reduce its workforce from 110,000 to fewer than 100,000, a move that would save $600 million annually.
In a sign of the tensions Maersk now faces, the company added that capital expenditure would be lower this year and next year and that the share buyback program for next year would be reviewed.
Container shipping, a sector whose fortunes depend on globalization, reported record profits from 2020 to 2022 as retail and industrial companies struggled to replenish inventories and respond to pent-up demand following the lifting of lockdowns due to the coronavirus.
In a statement on Friday, Maersk CEO Vincent Clerc said that “our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base.”
Maersk said this year’s profit would now be at the lower end of previous expectations. The gloomier outlook was accompanied by Maersk’s third-quarter results, which showed a sharp decline in both sales and profits.