Maersk plans lay off 2,000 in business shake-up, boosts outlook amid growing freight demand

The Danish giant is set to merge its sea and in-land logistics sectors. (Reuters)
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Updated 13 October 2020

Maersk plans lay off 2,000 in business shake-up, boosts outlook amid growing freight demand

  • Maersk currently has around 80,000 employees

COPENHAGEN: The world’s biggest container shipping line, Maersk, said demand was recovering faster than expected and lifted its earnings outlook, while also announcing plans to cut 2,000 jobs as it streamlines to cut costs.

Maersk, which handles about one in five containers shipped worldwide, said that though cargo volumes were still down on last year they had picked up more than forecast after falling sharply at the height of the coronavirus pandemic a few months ago.

“A.P. Moller — Maersk is on track to deliver a strong Q3 with solid earnings growth across all our businesses, in particular in Ocean and Logistics & Services,” CEO Soren Skou said in a statement. “Volumes have rebounded faster than expected, our costs have remained well under control, freight rates have increased due to strong demand,” Skou said.

Volumes in Maersk’s Ocean-division declined by around 3 percent in the third quarter compared to the same period last year, above an expected mid-single digit contraction, the company said.

The Danish company said it would cut 2,000 positions as a result of a major reorganization announced last month, where it seeks to integrate its seaborne container and in-land logistics businesses.

Maersk currently has around 80,000 employees. Shares in Maersk were down by around 1 percent on Tuesday morning.

The company expects restructuring costs of around $100 million in the third quarter related to the redundancies.

Maersk said it now expects full-year earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $7.5 billion to $8.0 billion before restructuring and integration costs, up from an earlier range of $6.0 billion to $7.0 billion.

Preliminary results for the third quarter showed revenue at $9.9 billion, while EBITDA before restructuring and integration costs came in at $2.4 billion, Maersk said.


China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.