A.P. Moller-Maersk A/S, a bellwether for global trade, plans to cut at least 10,000 jobs to shield its profitability as freight rates have declined and there’s increased competition in marine transport.
Maersk said it expects to save $600 million through the job cost measures, according to a statement on Friday.
The Copenhagen-based company will also put its 2024 share buyback program under review and reduced its estimate for capital expenditure in 2023 and 2024.
Maersk said earnings before interest, tax, depreciation and amortization fell to $1.88 billion in the third quarter. That compares with a median estimate of $1.89 billion in a survey of analysts compiled by Bloomberg.
Maersk said it now sees 2023 underlying Ebitda “toward the lower end” of a previously given range of $9.5 billion to $11 billion.
Container lines are facing an abrupt drop in earnings after record profits in 2021 and 2022 when high demand for consumer goods during the pandemic, coupled with limited vessel supply, drove freight prices higher.
This year, global economic growth has lost steam and companies are working through existing inventories instead of transporting new goods to Europe and the US. At the same time, an oversupply of vessels is building up on the market.
Global container trade will probably decline 0.5% to 2% this year, Maersk said, compared with its previous prediction of a contraction of 1% to 4%. – Bloomberg
