Maersk Oil to cut 1 in 10 jobs amid price slump

The oil business of Danish conglomerate A.P. Møller-Maersk on Monday said it will cut between 10 to 12 percent of its workforce due to slumping oil prices.

Maersk Oil to cut 1 in 10 jobs amid price slump
Maersk Oil is trying to cut costs by 20 percent. Photo: Claus Fisker/Scanpix
“We are operating in a materially changed oil price environment and have taken necessary decisions to reduce activity levels through 2015,” Maersk Oil chief executive Jakob Thomasen said in a statement.
“We expect the pressure to continue into 2016 and we must remain cost-focused to grow in this market,” he added.
The planned cuts are part of a bid to reduce operating costs by 20 percent this year. Maersk Oil has shed a total of 1,250 positions in 2015, including vacant positions that have not been filled and by cutting contractors.
A company spokesman declined to break out the number of job cuts announced on Monday, saying it was still in the process of informing those affected.
Oil prices have plummeted by more than 50 percent following a peak of more than $100 per barrel in June 2014. Prices have dropped dramatically due to reduced global demand, record production by the Organization of Petroleum Exporting Countries (OPEC) and a strong US dollar.
Maersk Oil produces approximately 550,000 barrels of oil equivalent per day.
Parent company A.P. Møller-Maersk on Friday warned that a weaker market for Maersk Line, the world's largest container shipping company and a global trade bellwether, would weigh on annual profits.
A.P. Møller-Maersk said underlying group profit would be $3.4 billion (3.1 billion euros) this year rather than the previously forecast $4.0 billion, as income from container shipping had been lower than expected.

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Maersk profits up as global supply chain disrupted

Danish shipping giant, AP Møller-Maersk, said Tuesday that profits were up sixfold in the third quarter as the coronavirus pandemic and global supply chain problems caused container prices to soar. 

Maersk headquarters in Copenhagen. The Danish shipping company posted hefty profits in the third quarter of 2021.
Maersk headquarters in Copenhagen. The Danish shipping company posted hefty profits in the third quarter of 2021. Photo: Niels Christian Vilmann/Ritzau Scanpix

“Maersk delivered record earnings” in the third quarter, chief executive Soren Skou said.

“In the ongoing exceptional market situation, with high demand in the US and global disruptions to the supply chains, we continued to increase capacity and expand our offerings to keep cargo moving for our customers.” 

Maersk said that its bottom-line net profit amounted to $5.438 billion in the period from July to September, compared with $947 million a year earlier.

Underlying, or operating, profit increased nearly fivefold to $5.859 billion and revenues jumped by 67 percent to $16.612 billion.

“Results in Q3 were driven by high freight rates in an exceptional market situation,” the group said.

Looking ahead, Maersk said it is sticking to its full year forecast for operating profit of 18-19 billion dollars. 

However, the ocean shipping division “is now expected to grow below” projected global container demand of between seven and nine percent this year, “subject to high uncertainties related to the current congestion and network disruption,” Maersk said.

“The current trading conditions are still subject to a higher-than-normal uncertainty due to the temporary nature of current demand patterns, disruptions in the supply chains,” it cautioned.

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