Denmark’s Maersk cuts 2,000 jobs despite ‘faster than expected’ rebound

Danish shipping giant Maersk announced Tuesday it was laying off some 2,000 employees as part of a restructuring plan, even as it said it had fared better than expected during the coronavirus pandemic.

Denmark's Maersk cuts 2,000 jobs despite 'faster than expected' rebound
Maersk containers in Brazil. Photo: Amanda Perobelli/Reuters/Ritzau Scanpix

The restructuring plan was originally announced in September and covers the “Ocean” and “Logistics and Services” branches of the company.

AP Møller-Mærsk, the largest shipping company in the world, has been refocusing on its transport activities since 2017 and said preliminary figures showed a better than expected third quarter for this year.

Revenue for the quarter was reported at $9.9 billion (8.4 billion euros), a drop of one percent compared to the same period a year earlier, despite the impact of the Covid-19 pandemic.

“Volumes have rebounded faster than expected, our costs have remained well under control, freight rates have increased due to strong demand and we are growing earnings rapidly in Logistics & Services,” the company's CEO, Søren Skou, said in a statement.

The third quarter results, which will be published on November 18th, will be impacted by about $100 million in restructuring costs, the company said.

“The outlook for Q4 is solid for the same reasons and we are therefore able to upgrade our expectations for the full year,” Skou said.

The group said it expected a gross operating profit for the year of $7.5-8.0 billion, but cautioned that the outlook for 2021 remained uncertain “due to the ongoing pandemic.”

READ ALSO: Maersk in profit despite coronavirus crisis, but other Danish sectors struggle

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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.

READ ALSO: Danish shipping giant calls for global carbon tax for shipping