COVID-19 Impact: Maersk Undergoes Major Restructuring

Danish industry leader Maersk will cut jobs as a part of comprehensive restructuring process that will affect a third of the company’s staff.



A.P. Maersk will slash jobs as a part of comprehensive reorganization that will affect a third of the Danish shipping giant’s staff as it seeks to integrate its seaborne container and in-land logistics businesses, it announced on Tuesday. The industry leader has become the latest company to highlight the impact of coronavirus on the global economy.

Maersk, which handled about one in five containers shipped worldwide, has been under immense scrutiny from investors to expedite its transformation from a cumbersome conglomerate. Lately, it has proved resilient in the face of the COVID-19 epidemic which has shuttered a good number of companies.

Maersk Restructuring Process Reorganization

To boost its customer proximity and deliver more effectively, Maersk will optimize its restructuring process by the end of the year.

Maersk’s latest cost cutting measures have helped the company double its share price since March. On Tuesday morning, its shares were trading 0.9% up at 9,652 crowns.

Danish Industry Leader Undergoes Restructuring

The Danish shipping company sold off Maersk Oil to French oil and gas company Total as a part of its restructuring plan to focus on container transport and logistics. In addition, it also sold off Maersk Tankers to AP Moller Holding for $1.7 billion, and is de-merging Maersk Drilling into a separate listed company. As of now, the Danish industry leader is still searching for a long-term solution to offshore vessel owning arm Maersk Supply Services.

Hamburg Sud, which Maersk bought in 2016, will remain a separate brand but its back office will be operated under the Maersk brand name.

Under the organizational shake-up, its Damco freight-forwarding business and Africa-focused carrier Safmarine will be integrated into Maersk by the end of the year and their brands will cease to exist, it said in a statement on Tuesday.

As a part of the reorganization process, the company will have to regrettably cut jobs and roles that will no longer be needed. According to a Maersk spokesperson around 26,000 to 27,000 employees will be left jobless out of Maersk’s total headcount of 80,000 due to the restructuring process.

The company is yet to shed light on how many would be laid off or on the total number of Maersk job cuts.

To boost its customer proximity and deliver more effectively, Maersk will optimize its restructuring process by the end of the year.

Reeling under the impact of coronavirus epidemic

Maesk’s problems are echoes by global shipping companies. As the coronavirus engulfs the world, the outlook for the shipping industry in 2020 continues to exacerbate. The pandemic is likely to result into major economic distress; the World Trade Organization estimates that world trade is expected to plunge somewhere between 13% and 32% in 2020. The shipping industry faces unprecedented challenges due to the outbreak. It has resulted in a situation where short-term and long-term impact on micro and micro-economic trends appear to be grim.

Ratings agency Moody’s has changed its economic forecast for the shipping industry from stable to negative for the coming 12-18 months.

Whether you want to stay up-to-date on the latest business news, read in-depth CEO interviews, or find new ideas on leadership, management and innovation, Industry Leaders Magazine is here to suit your needs and help you stay more informed.

Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

Who is Parag Agrawal, Twitter’s new CEO?

Who is Parag Agrawal, Twitter’s new CEO?

Indian-born Parag Agrawal took over as the CEO of Twitter as co-founder Jack Dorsey stepped down for the second time in his career. Agrawal is the fourth person to take the reins a
3 hours ago
Goldman Sachs rolls out paid leave for pregnancy loss

Goldman Sachs rolls out paid leave for pregnancy loss

Goldman employees are now eligible for 20 days of paid leave for a miscarriage or stillbirth. The investment banking giant is also increasing its retirement fund matching contribut
4 hours ago
Boom in Tech IPOs in 2021

Boom in Tech IPOs in 2021

The big tech cloud-based software companies such as Zoom, Snowflake, Asana, Airbnb, Amazon, Salesforce and Palantir have all witnessed a rise in stock prices as work from home and
23 hours ago
Walmart is Shopping for a New CFO

Walmart is Shopping for a New CFO

Walmart Inc. announced that they are looking for a new chief financial officer to replace Brett Biggs, who will begin transitioning from Walmart this year, after 22 years with the
1 day ago
Petrobras of Brazil Revises Expenditure on Oil Exploration and Production to $68 Billion

Petrobras of Brazil Revises Expenditure on Oil Exploration and Production to $68 Billion

“As long as there is a need, Petrobras will be [there] because of its efficiency and low carbon content,” Joaquim Silva e Luna, chief executive, Petrobras.
2 days ago
IPOs Stumbling in Face of High Valuations

IPOs Stumbling in Face of High Valuations

More than half of the companies that raised more than $1 billion for initial public offerings are now trading way below their listing price.
2 days ago