Shipping group A.P. Moller-Maersk reported a steep drop in third-quarter profit and revenue Friday and said it would cut at least 10,000 jobs in the face of overcapacity, rising costs and weaker prices.
Maersk, which controls about one-sixth of global container trade, transporting goods for a host of major retailers and consumer goods companies such as Walmart and Nike, flagged a steeper downturn in demand than analysts and investors had expected.
"Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling," he said.Jyske Bank analyst Morten Holm Enggaard said the share price was mainly hit by Maersk saying it would reconsider whether to continue its share buy-back program into 2024.
Maersk said it expects global container volumes in its ocean business, its largest segment, to fall by up to 2% this year, primarily as a result of weak consumer demand and destocking by firms following the scramble for goods in the aftermath of the coronavirus pandemic. Maersk said it was in the process of cutting its workforce from 110,000 in January this year to below 100,000, which will result in savings next year of $600 million compared to this year.
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