Shipping giant Maersk is laying off thousands more workers as weak demand and declining freight prices severely impact its revenues, signaling that the pandemic-driven surge in shipping is now reversing.
In its third-quarter results released Friday, Maersk, one of the world’s largest shipping companies, reported that its revenues had nearly halved to $12 billion compared to the same period last year.
The Danish company disclosed that it has already cut around 6,500 jobs this year due to “challenging market conditions.”
It now plans to eliminate an additional 3,500 jobs, with the majority of those layoffs expected to occur within the next eight weeks.
These combined cuts will bring the company’s workforce below 100,000 employees.
“Our industry is facing a new normal with subdued demand, prices returning to historical levels, and inflationary pressures on our cost base,” said Maersk Chief Executive Vincent Clerc in a statement.
Maersk posted record annual profits last year, but the company has been cautioning for months that the spike in shipping prices it experienced when economies reopened after pandemic lockdowns—unleashing a wave of pent-up demand for goods—could not be sustained.
The composite cost of shipping a 40-foot container on eight major global routes was $1,406 this week, a 54% drop compared to the same week in 2022.
Maersk also announced that it expects its full-year profit to be at the lower end of its previously forecasted range of $9.5 billion to $11 billion.
The company’s shares plunged as much as 12.5% in early trading on Friday, with losses later extending to a 17.2% drop by 7:41 AM ET.
