Maersk holds back on new hires to cut costs
Facing the uncertain shipping market, Maersk has begun to adopt a cautious attitude in recruitment as a coping strategy and cost control measures.
Maersk holds back on new hires
Recently, the global shipping giant Maersk said that it will suspend the recruitment of new employees because the fortunes of the global shipping market have reversed. Maersk said that with the end of Covid-19, the current status of the global shipping logistics market will be a new normal for the industry. It is understood that after making a fortune during the Covid-19, the fortunes of major shipping companies have changed. As a result, the Danish group will stop hiring new staff, saying it will think carefully before making new hires for its many offices around the world.
Maersk stressed that this is not a hiring freeze, but instead is part of the global container line’s increased focus on reducing costs during uncertain times. Maersk said the restrictions on recruiting new employees in this case was a natural move to drive their transformation while continuing to manage costs to reflect the current market norm. In the two years since the start of the Covid-19, Maersk has made more money than any other company in Danish business history.
In 2021 and 2022, due to the congestion of the global supply chain and the strong desire of European and American consumers to buy goods under the Covid-19, the global freight price has soared, and the group’s revenue will exceed $40 billion. However, by the end of 2022, the carnival in the global shipping market is over, replaced by a sharp drop in container freight rates. According to Drewry’s data, the current market average freight rate has dropped by more than 80% compared to the previous peak. Factors such as inflation and a large amount of new shipping capacity in the market have brought freight rates back to pre-Covid-19 levels.
It is reported that shortly after Vincent Clerc replaced Søren Skou as Maersk CEO at the beginning of this year, Vincent announced that Maersk would adopt a tight operating strategy to adapt to the new reality. Vincent undertook a massive overhaul of Maersk’s internal organization, adding several new regional directors, while several executives resigned. It is only now that the hiring restrictions announced by Vincent are actually taking effect at the global shipping group.
2022, the golden year for Maersk
Maersk said that in 2022, the company’s revenue increased by 32% to $81.5 billion, and its profit before interest and taxes also increased by 57% to $30.9 billion. 2022 was an unusually strong year for Maersk. Solid performance across all businesses drove unprecedented financial results amid exceptional market conditions in the first half. Maersk pointed out that in 2022, due to high freight rates and strong demand, especially in the first half of that year, its ocean freight achieved its strongest performance on record. At the same time, the group’s logistics and services revenue increased by 47%. Revenue growth was primarily attributable to the top 200 customers as the company continued to develop integrated solutions to meet end-to-end supply chain needs. In addition, growth in the warehousing was particularly strong. In its terminal business, Maersk said its earnings before interest and tax reached a record $1.2 billion.
