At least 10,000 jobs are being axed worldwide at global shipping giant AP Moller Maersk amid a slump in demand for container freight.
The Danish group revealed it is slashing its workforce from 110,000 in January to below 100,000 as it looks to cut costs by 600 million US dollars (£491 million) next year.
Maersk said it had already cut around 6,500 jobs since early 2023 and that another 3,500 would go as it ramps up cost-saving actions.
Up to 2,500 of those additional cuts will go in the “coming months”, with the remainder in 2024, it added.
The firm – the world’s second biggest shipping container business – declined to give details on the impact of the jobs losses on its UK operations.
Maersk has a number of sites based at UK ports, including a main office in Liverpool, as well as in Belfast in Northern Ireland, Felixstowe in Suffolk, Grangemouth in Scotland, London Gateway in Corringham, Portsmouth, South Shields, Southampton and Tilbury in Essex.
Overall, it has sites at 12 ports, 23 depots and nine dedicated refrigerated container facilities across the UK and Ireland.
It also has a technology team based in Maidenhead and a further office in Birmingham among its bases in the UK.
The shipping industry is suffering as the boom in demand seen during the pandemic years is fading.
The sector enjoyed record profits from 2020 to 2022 as economies began firing up after lockdowns were lifted and as firms struggled to secure stock in response to pent up demand.
Shipping costs soared as a result, but the market is now returning to more historically normal patterns, with demand also suppressed as the global economy has weakened.
In an update on Friday, Maersk warned that profits in 2024 would be at the lower end of previous guidance as it reported a steep drop in sales and earnings in its third quarter.
Maersk chief executive Vincent Clerc said: “Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base.”
He added: “Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance.”
AJ Bell investment director Russ Mould said the profit alert is troubling, given Maersk’s status as an economic bellwether and a “fair proxy for global growth”.
He said: “Transportation demand will be strong if the economy is going well, but the opposite will apply if there are clouds on the horizon.
“Maersk’s 9% share price slump on its latest results would suggest the global economy is losing speed.”
Published: by Radio NewsHub