Maersk to cut 10,000 jobs as shipping demand weakens

Maersk, a global leader in container shipping, is set to reduce its workforce by 10,000 jobs in response to the downturn in the shipping market. The Denmark-based company has announced a series of cost-cutting measures aimed at countering the effects of declining demand in the industry.

Restructuring Strategy Amid Market Downturn

In a recent discussion with analysts, Maersk CEO Vincent Clerc outlined the company’s strategy to navigate the challenging economic environment. “Given the challenging times ahead, we accelerated several cost and cash containment measures,” Clerc stated, confirming the depth of the market’s impact on operations.

• The company started the year with 110,000 employees and has already reduced that number by 6,500.
• The upcoming layoffs will see an additional 3,500 jobs cut by the end of next year, marking a 9% decrease in its global workforce.
• “This is not a diet. This is a reset of the baseline,” Clerc emphasized, signaling a substantial recalibration of the company’s structure.

Financial Adjustments in Response to Market Conditions

The restructuring will bring about significant financial adjustments. Maersk is bracing for restructuring charges of $350 million in the current year, marking an increase from the previously announced $150 million.

Market Reaction and Forward-Looking Statements

Following the announcement, there was a noticeable drop in Maersk’s stock value, with a 17% decline to a 52-week low observed. This movement in the market reflects investor response to the company’s cost-cutting initiatives and the general sentiment about future industry conditions.

Major layoffs continue

The reduction at Maersk comes amid a flurry of layoffs in 2023.

Major North American companies, including National Bank, Nokia, Desjardins, Scotiabank, LinkedIn, Amazon, Twitch, and Google, have announced deep job cuts as they continue to navigate challenging economic conditions.

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Termination agreements for Maersk employees

In Canada, non-unionized employees at Maersk are owed full severance pay when they lose their jobs due to downsizing, corporate restructuring, or the closure of the business.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

People working “on contract” or as a contractor may also be owed severance pay — given that many employees in Canada are often misclassified as independent contractors.

Severance can be as much as 24 months’ pay, depending on a number of factors.

LEARN MORE
• Severance for provincially regulated employees
• Rights to severance for federally regulated workers
• Severance packages in mass layoffs

WATCH: Employment lawyer Lior Samfiru explains what rights employees have if they are being fired or let go on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper severance if it falls short of what you are actually owed.

If you don’t receive the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.

In some cases, employers pressure staff into accepting poor severance packages, such as imposing a deadline for accepting the offer.

Non-unionized employees in Canada have up to two years from the date of their dismissal to pursue a claim for full severance pay.