An additional 3,500 positions are slated for elimination at the shipping company as a result of escalating expenses and a decline in market shipping rates.
The organization responsible for one-sixth of the world’s container commerce has disclosed its intention to reduce its workforce by 10,000 in light of the deteriorating economic conditions.
The higher figure was disclosed by AP Moller-Maersk, which had previously declared its intention to implement 6,500 redundancies, due to a significant decline in both revenues and profits.
The industry, which experienced significant growth amidst the pandemic, is presently confronted with the issue of overcapacity. As a result of decelerated international trade amid the prevailing economic downturn.
In addition to this, rising oil and other expenses have affected the company’s bottom line.
Compartmental earnings decreased from $10.9 billion in the first quarter of the year to $1.9 billion in the third quarter.
Following the update from the Copenhagen-based company, shares fell as much as 17%, reaching a three-year low.
“Our industry is confronted with a new normal characterized by subdued demand, prices returning to historical levels, and inflationary pressure on our cost structure,” said chief executive Vincent Clerc.
Overcapacity in most regions has lowered prices and slowed ship recycling since summer.
Analysts blamed the share price drop on doubts about a 2014 share repurchase programme.
Maersk anticipated a 2% decline in global container volumes for its ocean operation, which constitutes its largest division, this year.
It is stated that the employment cuts will generate savings of $600 million for the following year.