12 ms·

Maersk to cut 10k jobs as shipping demand drops

212 points by derbOac 3y ago

smartbit 3y ago
https://archive.ph/Hv7qj https://archive.ph/Hv7qj
nologic01 3y ago
The idea is that shipping is a proxy for the "real economy" but given how much cyclical speculation these actors undertake with the ordering and scrapping of ships and the associated "costs" of personnel, I wonder to what extend that is really true.
salmonlogs 3y ago
> Danish shipping giant Maersk has posted earnings before interest and taxes (EBIT) of $30.9bn for the full year ended 31 December 2022, a 57% surge from $19.6bn in 2021. > This is said to be the firm’s best-ever annual result. https://www.ship-technology.com/news/maersk-logs-record-profit-freight/ https://www.ship-technology.com/news/maersk-logs-record-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better returns. Companies wonder why employees are not loyal, change companies every 2 years, are disengaged, and not working hard enough. It's because most companies treat employees are expendable and are ready to fire them with a moments notice if some shareholder wants to buy a bigger yacht this year.
- ekianjo 3y ago
  > Companies wonder why employees are not loyal Never heard any CEO wondering about that.
  - mschuster91 3y ago
    Good C-level execs actually care about staff retention and fluctuation rates. The really good ones make HR ask about departure reasons in exit interviews and act accordingly - given that each departure costs a significant amount of money in hiring and training costs, it makes sense to weed out bad mid-level managers.
    - lotsofpulp 3y ago
      > given that each departure costs a significant amount of money in hiring and training costs For every job in every business around the world? I doubt it.
      - mschuster91 3y ago
        Every job has at least 2 weeks worth of training cost. Even fast food or shelf stocking.
        ekianjo 3y ago
        Thats called the cost of doing business. You cant have 100% retention.
- roomey 3y ago
  I'm not sure why you are getting downvoted as you are totally correct. It's a case of rules for thee and not for me. It is an uneven power balance between corporations and workers.
  - randomdata 3y ago
    > It is an uneven power balance between corporations and workers. Then the solution is obvious: Workers should incorporate and sell their work under that corporate banner.
    - roomey 3y ago
      That's not the obvious solution. A better solution for example would be giving the workers tools and knowledge to get what they want just from their job (because everyone is different).
      - randomdata 3y ago
        But then they'd still be workers and not corporations, and thus subject to the power imbalance spoken of earlier. Perhaps we could simply assign everyone a corporation at birth? Then it doesn't even have to be an active activity.
        roomey 3y ago
        What's wrong with being a worker? That doesn't mean in and of itself, that there is a power imbalance. Companies need workers, it is a two way street.
- hliyan 3y ago
  Looking at the phenomenon more clinically: when management attempts to extract the maximum amount of work for the minimum amount of pay, it's only natural that the employee attempts to maximize pay for the least amount of work. Both are being economically rational, but economic rationality at times can be indistinguishable from psychopathy.
  - Lev1a 3y ago
    The problem with this kind of mass-layoffs to maximize earnings is that it's a very short-term gain prioritized over long-term growth, a symptom of the cancer that is the mentality "shareholders expect infinite growth forever".
    - gruez 3y ago
      >it's a very short-term gain prioritized over long-term growth, a symptom of the cancer that is the mentality "shareholders expect infinite growth forever". But "shareholders expect infinite growth forever" directly contradicts "short-term gain prioritized over long-term growth"? Even if they prioritized long term growth that would still be "shareholders expect infinite growth forever".
      - ImPostingOnHN 3y ago
        > But "shareholders expect infinite growth forever" directly contradicts "short-term gain prioritized over long-term growth"? But it doesn't? Shareholders expect companies to make whatever decisions are necessary to maximize short term profits, expect those profits to be infinite, and expect this to happen every quarter, every year, in perpetuity.
        gruez 3y ago
        The part that's contradictory and that you omitted was "short-term gain prioritized over long-term growth". While it's theoretically possible for the two to coexist, the way it's presented is as one-or-the-other proposition, which is where the contradiction comes from. If it wasn't one-or-the-other, people wouldn't getting mad over it.
- mo_42 3y ago
  The earnings Maersk has posted reflect the past. The mass layoffs reflect the future of the company (i.e., less demand in the future). So I wouldn't put these two things into one argument necessary. Then, an absolute number of profit doesn't reveal much. Maybe this seemingly huge profit is tiny compared to the effort to make it (i.e., the profit margin). As much as I'd like to see a world where we value more aspects of a business than only profits, I can not change it alone. There's a brutal competition of companies to earn a certain profit margin. And Maersk is more or less forced to play this game until we change the rules.
  - mschuster91 3y ago
    > The earnings Maersk has posted reflect the past. The mass layoffs reflect the future of the company (i.e., less demand in the future). And should demand pick up again in 2-3 years worth of time, they'll now have a really hard time ramping hiring back up... fucking beancounters don't learn, even as the aviation industry is right now showing just how bad this effect can get.
    - gruez 3y ago
      I'm going to go on a limb and say that the "fucking beancounters" has done more financial modeling on this decision than some armchair CFO on hn who probably haven't even seen their last quarterly statement.
      - hef19898 3y ago
        Especially since people on HN eho are "tech worker" assume the, including an over exagerated importance of themselves, tech employment dynamics apply to other industries. Not that the tech employment is anything like people think is, the mass layoffs showed as much. And as soon as FAANG start hiring again, most on here would be happy to sign up again.
    - ViewTrick1002 3y ago
      Not really. The shipping industry is known to be extremely cyclical with a liquid labor market. The companies who survive are the ones that react accordingly. In just a couple of years they have went from scarcity and record profits to a capacity glut and shipping prices cratering.
- matwood 3y ago
  They had a huge surge of demand coming out of COVID, and hired to meet that demand. That demand is gone, and they are moving their staff requirements back down closer to pre-COVID (and not even that far). What exactly were they suppose to do?
  - mschuster91 3y ago
    Keep the headcount as high as possible while still turning a profit so they can react on demand going up again in a short notice.
    - gruez 3y ago
      >Keep the headcount as high as possible while still turning a profit Opportunity cost is a thing. Just because you're not in the red doesn't mean the decision is costless. Think about it from the opposite perspective. Suppose you're a company with the right number of employees (neither too much nor too little) but you see demand is dropping. Would you go on a hiring spree so you could "react on demand going up again in a short notice"?
      - ethbr1 3y ago
        Specifically, people forget that there always options to deploy limited capital. - Spend it on labor - Spend it on sales - Spend it on R&D - Fund capital improvements - Save it in bonds Which is better for Maersk in a softening demand environment? To retain headcount or invest in capital improvements on their ships/facilities? Their CFO office has definitely modeled relative ROI. And, from a more socially conscious perspective, let's not forget the shipping industry is trying to budget massive capital expenditures to reduce their carbon footprint by reworking their ship powerplants.
    - matwood 3y ago
      Anything done to keep headcount above necessary levels would have caused slower hiring and in turn caused the demand shock to go on even longer. I'm curious about your solution though. How many people do they need to keep on staff that are not doing anything? How much profit are they allowed? Do they have to lose money before they are allowed to trim the workforce? Do they need to be prepared for another COVID-level demand surge?
- Oras 3y ago
  > Companies wonder why employees are not loyal, change companies every 2 years, are disengaged, and not working hard enough. Working hard is a trait you earn for yourself not just for the pay check. If you work hard, learn more, I’m sure you’ll have better chances improving your career or even starting your own business later
  - vasdae 3y ago
    Depends on what your job is. If you are delivering packages in a van, you are just a cog. You can work as hard as you want and they will replace you all the same.
- boeingUH60 3y ago
  Do you suggest they keep employees around with nothing to do because of significantly reduced shipping demand? I agree with your point about getting laid off being awful, but I think this should be solved by the government having a robust social safety net (funded by taxes) so that getting laid off doesn’t cause stress. Fortunately, Denmark already scores high in this area.
  - mnky9800n 3y ago
    Maybe companies can have like a savings account for when they don't make a lot of money, that way if they think they might not make as much then they can cover the difficult times.
    - carlosjobim 3y ago
      Isn't it much better that the employees instead go work somewhere were they're needed? What in the world would be the reason to keep them around doing nothing? Give them better pay when they actually work and then send them on their way.
      - mnky9800n 3y ago
        I feel like, > surprise! You are probably needed elsewhere! Is not the way to handle this kind of thing.
        ethbr1 3y ago
        The difficulty is that putting the onus of reallocation on a centralized authority leads to less efficient allocation (e.g. all the problems with command economies). Decentralized people that each make individual choices more quickly and ideally allocate unused labor where it's most needed. ... but to the broader point from sibling threads, the humane solution here is {permit companies to be agile with layoffs} + {fund strong government-provided safety nets for unemployed workers}.
      - interactivecode 3y ago
- pjmlp 3y ago
  Indeed, long are the days companies would be happy just to stay on business, instead of the exponential growth utopia driven by MBA folks. Having been in a couple of similar situations, the only loyalty worth having is with the team.
  - hef19898 3y ago
    Shipping is decidedly not a VC (as oppossed to MBA) driven hyper growth sector. It is rather directly linked to global economic growth, with only very limited means to influence demand in general.
    - pjmlp 3y ago
      They have enough people with MBA on the management board. Usually the only companies that have empathy for their employees, management started on the bottom, instead out of management school with their beloved MBA degrees.
- simonh 3y ago
  From 2021 to 2022 Maersk increased head count by 20%. Now they're cutting it by 10%, but it's not necessarily the same workers. A 10% churn rate is pretty common. A decent chunk of the 10% cuts could well be managed through early retirement, natural leavers and voluntary redundancies. European countries have robust rules around these things that often require companies to offer voluntary terms and such first. I think the outrage about this is almost certainly misplaced.
- darkclouds 3y ago
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- candu 3y ago
  Well, for their Danish employees at least, they’ll get 3-6 months notice, and they’ll be required to negotiate with employee representatives due to the size of layoffs. And then a combination of public and private unemployment benefits kick in. And if you want to e.g. retrain or pursue a graduate degree, there’s support for that too. So there’s a solid safety net, but employers are also required to shoulder some responsibility for supporting terminated employees.
- Proven 3y ago
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- seymore_12 3y ago
  Top ocean carriers (including Maersk) are mature and well established organizations. For what concerns their core activities, that is transporting of containers from A to B across oceans, short sea and occasional inland, they are Pareto efficient [1] The surge in the transportation services demand during COVID couldn't be resolved by additional hiring and was offset by increase in freight rates, hence the enormous profits. They couldn't resolve surge demand by hiring, as their bottleneck was and still is the land infrastructure, sea ports, terminal (in)efficiency, inland transport to which they have little control of. Maersk decided to become vertically integrated carrier and started acquiring various companies, including last mile delivery services, custom's brokers, air freight capacity etc. This, in my opinion, contributed to the increase in the headcount. Other carriers followed the Maersk acquisition spree... [1] https://en.wikipedia.org/wiki/Pareto_efficiency https://en.wikipedia.org/wiki/Pareto_efficiency
- black_13 3y ago
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- InvOfSmallC 3y ago
  Maersk didn't hire to meet demand. They didn't build new vessels to meet demand. Freight rates went up at same capacity as before pandemic.
- WentFullRetard 3y ago
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deleted 3y ago
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TruthWillHurt 3y ago
Slow down in shipping demand? Few months ago a ship got stuck in the Suez Canal and the world went bat-$h1t crazy, but now shipping is a chill business? I don't get these execs.
- Kye 3y ago
  That was over two years ago.
- matwood 3y ago
  Timing is everything.
fredgrott 3y ago
Since this is future demand it might suggest that some significant moves from China manufacturing to N America manufacturing including both Canada and Mexico. A confirmation would be to see if truck traffic through specific border town routes went up.
- Kye 3y ago
  This might be helpful: https://www.bts.gov/browse-statistical-products-and-data/border-crossing-data/border-crossingentry-data https://www.bts.gov/browse-statistical-products-and-data/bor... And a map with helpful bubbles and options to drill down to various modes: https://explore.dot.gov/views/BorderCrossingData/Map?%3Aembed=y&%3AisGuestRedirectFromVizportal=y https://explore.dot.gov/views/BorderCrossingData/Map?%3Aembe... There are tabs at the top of the map with different views. Some are specific to this question.
seydor 3y ago
maybe they got bigger containers . Or just the cargo business is continuously deflating after the pandemic, which is hardly news
shyn3 3y ago
Recessions start when all the unions get their new contracts. 2024 is going to be detrimental for many people. Lots of job and property losses coming soon
alberth 3y ago
Both shipping & the manufacturing of corrugated boxes are leading signals to the health of the economy. Really hope we’re not approaching a downturn.
mistrial9 3y ago
people in the civilized West might have forgotten the long and standard history of slavery for labor. Rome was a slave state. Lots of post-Rome empires have traded slaves. Slaves do labor. Many of the comments here immediately and unequivocally supporting management are a reminder that the veneer of civility is soon lost when money is at stake.
mattas 3y ago
There's an interesting narrative forming in global trade around nearshoring/reshoring. The framing is often around manufacturing moving from China to Mexico. News like this supports that narrative. While it's somewhat clear that manufacturing is moving out of China, it's less clear where it's going.
hipadev23 3y ago
Flexport still probably making 50 offers a day so they can rescind them the following week
- Racing0461 3y ago
  Is flexport an "industry plant"? I see them posting here literally every month saying they are hiring and on linkedin but never anything more than that.
ggrothendieck 3y ago
The HN news title seems inaccurate. This is not necessarily a drop in demand nor is it applicable to all shipping as also suggested by the title. The article suggests it is an oversupply of container ships with very few ships scrapped as opposed to demand: "The industry invested heavily in new container ships during and after the pandemic to meet strong demand and benefit from record freight rates. A large number of new ships entered the market since the summer with no signs of idling or scrapping, said Clerc." Furthermore just because container ships were over ordered does not mean that other types of ships were so it is misleading to just refer to shipping in the title. It should be "container shipping".
CherylBlaikie 3y ago
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camila45 3y ago
[flagged]
tpmx 3y ago
The 2022 annual report says 110k+ employees. The 2021 annual report says 95k+ employees. The 2020 annual report says 80k+ employees. Seems like they have acquired quite bit in the past few years, e.g.: https://www.freightwaves.com/news/shipping-giant-maersk-continues-buying-spree-after-best-quarter-ever https://www.freightwaves.com/news/shipping-giant-maersk-cont... Shipping giant Maersk continues buying spree after best quarter ever (November 2021)
- windmark 3y ago
  Indeed similar to all Big Tech companies laying off the past year.
- ekianjo 3y ago
  Seems like a regression to the normal
- TeMPOraL 3y ago
  Surprised to see steady increase in recent years. What are the 2019 numbers? 2020 and 2021 are the pandemic years, and Maersk should've been one of the most heavily impacted companies in the early months.
  - tpmx 3y ago
    Relatively stable around 80k for 2018 and 2019. It appears they have executed a strategy to become a vertically integrated end-to-end logistics company rather than just a container shipping company. Profits during the pandemic allowed them to accelerate the change. https://qz.com/2103412/maersk-is-no-longer-just-a-shipping-company https://qz.com/2103412/maersk-is-no-longer-just-a-shipping-c... (Have a look at that quarterly profit graph...)
    - hef19898 3y ago
      Maersk went hard into the 3PL and fulfillment business, includimg hiring quite a few people from Amazon. They are in a quite interesting position for that.
pbjtime 3y ago
This is thanks to everyone downloading cars. I hope you're happy with yourselves.
realclarkeg687 3y ago
𝐓𝐨 𝐚𝐜𝐡𝐢𝐞𝐯𝐞 𝐲𝐨𝐮𝐫 𝐠𝐨𝐚𝐥𝐬, 𝐬𝐞𝐞𝐤 𝐭𝐡𝐞 𝐚𝐬𝐬𝐢𝐬𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐚𝐧 𝐞𝐱𝐩𝐞𝐫𝐭. 𝐈𝐧 𝐦𝐲 𝐨𝐰𝐧 𝐞𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐞, 𝐈 𝐬𝐮𝐬𝐩𝐞𝐜𝐭𝐞𝐝 𝐦𝐲 𝐩𝐚𝐫𝐭𝐧𝐞𝐫 𝐨𝐟 𝐢𝐧𝐟𝐢𝐝𝐞𝐥𝐢𝐭𝐲 𝐛𝐮𝐭 𝐈 𝐥𝐚𝐜𝐤𝐞𝐝 𝐩𝐫𝐨𝐨𝐟. 𝐀𝐟𝐭𝐞𝐫 𝐫𝐞𝐬𝐞𝐚𝐫𝐜𝐡𝐢𝐧𝐠 𝐨𝐧𝐥𝐢𝐧𝐞, 𝐈 𝐝𝐢𝐬𝐜𝐨𝐯𝐞𝐫𝐞𝐝 𝐦𝐚𝐧𝐲 𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐢𝐬 𝐩𝐚𝐫𝐭𝐢𝐜𝐮𝐥𝐚𝐫 𝐞𝐱𝐩𝐞𝐫𝐭 𝐰𝐡𝐨 𝐡𝐞𝐥𝐩𝐞𝐝 𝐭𝐡𝐞𝐦 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐬𝐩𝐲𝐢𝐧𝐠 𝐦𝐢𝐬𝐬𝐢𝐨𝐧. 𝐄𝐧𝐜𝐨𝐮𝐫𝐚𝐠𝐞𝐝 𝐛𝐲 𝐭𝐡𝐞𝐬𝐞 𝐫𝐞𝐯𝐢𝐞𝐰, 𝐈 𝐜𝐨𝐧𝐭𝐚𝐜𝐭𝐞𝐝 𝐭𝐡𝐞 𝐡𝐚𝐜𝐤𝐞𝐫𝐬𝐩𝐲𝐭𝐞𝐜𝐡 (@) 𝐆𝐦 𝐚𝐢𝐥 𝐂 𝐨𝐦 𝐚𝐧𝐝 𝐡𝐞 𝐠𝐚𝐯𝐞 𝐦𝐞 𝐚𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐥𝐨𝐠𝐢𝐧 𝐝𝐞𝐭𝐚𝐢𝐥𝐬 𝐭𝐨 𝐚𝐜𝐜𝐞𝐬𝐬 𝐦𝐲 𝐩𝐚𝐫𝐭𝐧𝐞𝐫'𝐬 𝐩𝐡𝐨𝐧𝐞. 𝐓𝐡𝐢𝐬 𝐚𝐥𝐥𝐨𝐰𝐞𝐝 𝐦𝐞 𝐭𝐨 𝐯𝐢𝐞𝐰 𝐭𝐞𝐱𝐭 𝐦𝐞𝐬𝐬𝐚𝐠𝐞𝐬, 𝐜𝐚𝐥𝐥𝐬, 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩 𝐜𝐨𝐧𝐯𝐞𝐫𝐬𝐚𝐭𝐢𝐨𝐧𝐬, 𝐚𝐧𝐝 𝐡𝐞𝐫 𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧. 𝐖𝐢𝐭𝐡 𝐭𝐡𝐞 𝐞𝐯𝐢𝐝𝐞𝐧𝐜𝐞 𝐈 𝐠𝐚𝐭𝐡𝐞𝐫𝐞𝐝, 𝐈 𝐰𝐚𝐬 𝐚𝐛𝐥𝐞 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐧𝐞𝐜𝐞𝐬𝐬𝐚𝐫𝐲 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐢𝐧 𝐦𝐲 𝐥𝐢𝐟𝐞. 𝐈𝐟 𝐲𝐨𝐮 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐚𝐜𝐜𝐞𝐬𝐬 𝐲𝐨𝐮𝐫 𝐩𝐚𝐫𝐭𝐧𝐞𝐫 𝐩𝐡𝐨𝐧𝐞 𝐟𝐨𝐫 𝐬𝐩𝐲𝐢𝐧𝐠 𝐩𝐮𝐫𝐩𝐨𝐬𝐞, 𝐈 𝐡𝐢𝐠𝐡𝐥𝐲 𝐫𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝 𝐭𝐡𝐢𝐬 𝐞𝐱𝐩𝐞𝐫𝐭.
Arnold07 3y ago
[dead]

212 points by derbOac 3y ago

https://archive.ph/Hv7qj https://archive.ph/Hv7qj

The idea is that shipping is a proxy for the "real economy" but given how much cyclical speculation these actors undertake with the ordering and scrapping of ships and the associated "costs" of personnel, I wonder to what extend that is really true.

salmonlogs 3y ago

> Danish shipping giant Maersk has posted earnings before interest and taxes (EBIT) of $30.9bn for the full year ended 31 December 2022, a 57% surge from $19.6bn in 2021. > This is said to be the firm’s best-ever annual result. https://www.ship-technology.com/news/maersk-logs-record-profit-freight/ https://www.ship-technology.com/news/maersk-logs-record-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better returns. Companies wonder why employees are not loyal, change companies every 2 years, are disengaged, and not working hard enough. It's because most companies treat employees are expendable and are ready to fire them with a moments notice if some shareholder wants to buy a bigger yacht this year.

ekianjo 3y ago
> Companies wonder why employees are not loyal Never heard any CEO wondering about that.
- mschuster91 3y ago
  Good C-level execs actually care about staff retention and fluctuation rates. The really good ones make HR ask about departure reasons in exit interviews and act accordingly - given that each departure costs a significant amount of money in hiring and training costs, it makes sense to weed out bad mid-level managers.
  - lotsofpulp 3y ago
    > given that each departure costs a significant amount of money in hiring and training costs For every job in every business around the world? I doubt it.
    - mschuster91 3y ago
      Every job has at least 2 weeks worth of training cost. Even fast food or shelf stocking.
      - ekianjo 3y ago
        Thats called the cost of doing business. You cant have 100% retention.
roomey 3y ago
I'm not sure why you are getting downvoted as you are totally correct. It's a case of rules for thee and not for me. It is an uneven power balance between corporations and workers.
- randomdata 3y ago
  > It is an uneven power balance between corporations and workers. Then the solution is obvious: Workers should incorporate and sell their work under that corporate banner.
  - roomey 3y ago
    That's not the obvious solution. A better solution for example would be giving the workers tools and knowledge to get what they want just from their job (because everyone is different).
    - randomdata 3y ago
      But then they'd still be workers and not corporations, and thus subject to the power imbalance spoken of earlier. Perhaps we could simply assign everyone a corporation at birth? Then it doesn't even have to be an active activity.
      - roomey 3y ago
        What's wrong with being a worker? That doesn't mean in and of itself, that there is a power imbalance. Companies need workers, it is a two way street.
hliyan 3y ago
Looking at the phenomenon more clinically: when management attempts to extract the maximum amount of work for the minimum amount of pay, it's only natural that the employee attempts to maximize pay for the least amount of work. Both are being economically rational, but economic rationality at times can be indistinguishable from psychopathy.
- Lev1a 3y ago
  The problem with this kind of mass-layoffs to maximize earnings is that it's a very short-term gain prioritized over long-term growth, a symptom of the cancer that is the mentality "shareholders expect infinite growth forever".
  - gruez 3y ago
    >it's a very short-term gain prioritized over long-term growth, a symptom of the cancer that is the mentality "shareholders expect infinite growth forever". But "shareholders expect infinite growth forever" directly contradicts "short-term gain prioritized over long-term growth"? Even if they prioritized long term growth that would still be "shareholders expect infinite growth forever".
    - ImPostingOnHN 3y ago
      > But "shareholders expect infinite growth forever" directly contradicts "short-term gain prioritized over long-term growth"? But it doesn't? Shareholders expect companies to make whatever decisions are necessary to maximize short term profits, expect those profits to be infinite, and expect this to happen every quarter, every year, in perpetuity.
      - gruez 3y ago
        The part that's contradictory and that you omitted was "short-term gain prioritized over long-term growth". While it's theoretically possible for the two to coexist, the way it's presented is as one-or-the-other proposition, which is where the contradiction comes from. If it wasn't one-or-the-other, people wouldn't getting mad over it.
mo_42 3y ago
The earnings Maersk has posted reflect the past. The mass layoffs reflect the future of the company (i.e., less demand in the future). So I wouldn't put these two things into one argument necessary. Then, an absolute number of profit doesn't reveal much. Maybe this seemingly huge profit is tiny compared to the effort to make it (i.e., the profit margin). As much as I'd like to see a world where we value more aspects of a business than only profits, I can not change it alone. There's a brutal competition of companies to earn a certain profit margin. And Maersk is more or less forced to play this game until we change the rules.
- mschuster91 3y ago
  > The earnings Maersk has posted reflect the past. The mass layoffs reflect the future of the company (i.e., less demand in the future). And should demand pick up again in 2-3 years worth of time, they'll now have a really hard time ramping hiring back up... fucking beancounters don't learn, even as the aviation industry is right now showing just how bad this effect can get.
  - gruez 3y ago
    I'm going to go on a limb and say that the "fucking beancounters" has done more financial modeling on this decision than some armchair CFO on hn who probably haven't even seen their last quarterly statement.
    - hef19898 3y ago
      Especially since people on HN eho are "tech worker" assume the, including an over exagerated importance of themselves, tech employment dynamics apply to other industries. Not that the tech employment is anything like people think is, the mass layoffs showed as much. And as soon as FAANG start hiring again, most on here would be happy to sign up again.
  - ViewTrick1002 3y ago
    Not really. The shipping industry is known to be extremely cyclical with a liquid labor market. The companies who survive are the ones that react accordingly. In just a couple of years they have went from scarcity and record profits to a capacity glut and shipping prices cratering.
matwood 3y ago
They had a huge surge of demand coming out of COVID, and hired to meet that demand. That demand is gone, and they are moving their staff requirements back down closer to pre-COVID (and not even that far). What exactly were they suppose to do?
- mschuster91 3y ago
  Keep the headcount as high as possible while still turning a profit so they can react on demand going up again in a short notice.
  - gruez 3y ago
    >Keep the headcount as high as possible while still turning a profit Opportunity cost is a thing. Just because you're not in the red doesn't mean the decision is costless. Think about it from the opposite perspective. Suppose you're a company with the right number of employees (neither too much nor too little) but you see demand is dropping. Would you go on a hiring spree so you could "react on demand going up again in a short notice"?
    - ethbr1 3y ago
      Specifically, people forget that there always options to deploy limited capital. - Spend it on labor - Spend it on sales - Spend it on R&D - Fund capital improvements - Save it in bonds Which is better for Maersk in a softening demand environment? To retain headcount or invest in capital improvements on their ships/facilities? Their CFO office has definitely modeled relative ROI. And, from a more socially conscious perspective, let's not forget the shipping industry is trying to budget massive capital expenditures to reduce their carbon footprint by reworking their ship powerplants.
  - matwood 3y ago
    Anything done to keep headcount above necessary levels would have caused slower hiring and in turn caused the demand shock to go on even longer. I'm curious about your solution though. How many people do they need to keep on staff that are not doing anything? How much profit are they allowed? Do they have to lose money before they are allowed to trim the workforce? Do they need to be prepared for another COVID-level demand surge?
Oras 3y ago
> Companies wonder why employees are not loyal, change companies every 2 years, are disengaged, and not working hard enough. Working hard is a trait you earn for yourself not just for the pay check. If you work hard, learn more, I’m sure you’ll have better chances improving your career or even starting your own business later
- vasdae 3y ago
  Depends on what your job is. If you are delivering packages in a van, you are just a cog. You can work as hard as you want and they will replace you all the same.
boeingUH60 3y ago
Do you suggest they keep employees around with nothing to do because of significantly reduced shipping demand? I agree with your point about getting laid off being awful, but I think this should be solved by the government having a robust social safety net (funded by taxes) so that getting laid off doesn’t cause stress. Fortunately, Denmark already scores high in this area.
- mnky9800n 3y ago
  Maybe companies can have like a savings account for when they don't make a lot of money, that way if they think they might not make as much then they can cover the difficult times.
  - carlosjobim 3y ago
    Isn't it much better that the employees instead go work somewhere were they're needed? What in the world would be the reason to keep them around doing nothing? Give them better pay when they actually work and then send them on their way.
    - mnky9800n 3y ago
      I feel like, > surprise! You are probably needed elsewhere! Is not the way to handle this kind of thing.
      - ethbr1 3y ago
        The difficulty is that putting the onus of reallocation on a centralized authority leads to less efficient allocation (e.g. all the problems with command economies). Decentralized people that each make individual choices more quickly and ideally allocate unused labor where it's most needed. ... but to the broader point from sibling threads, the humane solution here is {permit companies to be agile with layoffs} + {fund strong government-provided safety nets for unemployed workers}.
    - interactivecode 3y ago
pjmlp 3y ago
Indeed, long are the days companies would be happy just to stay on business, instead of the exponential growth utopia driven by MBA folks. Having been in a couple of similar situations, the only loyalty worth having is with the team.
- hef19898 3y ago
  Shipping is decidedly not a VC (as oppossed to MBA) driven hyper growth sector. It is rather directly linked to global economic growth, with only very limited means to influence demand in general.
  - pjmlp 3y ago
    They have enough people with MBA on the management board. Usually the only companies that have empathy for their employees, management started on the bottom, instead out of management school with their beloved MBA degrees.
simonh 3y ago
From 2021 to 2022 Maersk increased head count by 20%. Now they're cutting it by 10%, but it's not necessarily the same workers. A 10% churn rate is pretty common. A decent chunk of the 10% cuts could well be managed through early retirement, natural leavers and voluntary redundancies. European countries have robust rules around these things that often require companies to offer voluntary terms and such first. I think the outrage about this is almost certainly misplaced.
darkclouds 3y ago
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candu 3y ago
Well, for their Danish employees at least, they’ll get 3-6 months notice, and they’ll be required to negotiate with employee representatives due to the size of layoffs. And then a combination of public and private unemployment benefits kick in. And if you want to e.g. retrain or pursue a graduate degree, there’s support for that too. So there’s a solid safety net, but employers are also required to shoulder some responsibility for supporting terminated employees.
Proven 3y ago
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seymore_12 3y ago
Top ocean carriers (including Maersk) are mature and well established organizations. For what concerns their core activities, that is transporting of containers from A to B across oceans, short sea and occasional inland, they are Pareto efficient [1] The surge in the transportation services demand during COVID couldn't be resolved by additional hiring and was offset by increase in freight rates, hence the enormous profits. They couldn't resolve surge demand by hiring, as their bottleneck was and still is the land infrastructure, sea ports, terminal (in)efficiency, inland transport to which they have little control of. Maersk decided to become vertically integrated carrier and started acquiring various companies, including last mile delivery services, custom's brokers, air freight capacity etc. This, in my opinion, contributed to the increase in the headcount. Other carriers followed the Maersk acquisition spree... [1] https://en.wikipedia.org/wiki/Pareto_efficiency https://en.wikipedia.org/wiki/Pareto_efficiency
black_13 3y ago
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InvOfSmallC 3y ago
Maersk didn't hire to meet demand. They didn't build new vessels to meet demand. Freight rates went up at same capacity as before pandemic.
WentFullRetard 3y ago
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TruthWillHurt 3y ago

Slow down in shipping demand? Few months ago a ship got stuck in the Suez Canal and the world went bat-$h1t crazy, but now shipping is a chill business? I don't get these execs.

Kye 3y ago
That was over two years ago.
matwood 3y ago
Timing is everything.

fredgrott 3y ago

Since this is future demand it might suggest that some significant moves from China manufacturing to N America manufacturing including both Canada and Mexico. A confirmation would be to see if truck traffic through specific border town routes went up.

Kye 3y ago
This might be helpful: https://www.bts.gov/browse-statistical-products-and-data/border-crossing-data/border-crossingentry-data https://www.bts.gov/browse-statistical-products-and-data/bor... And a map with helpful bubbles and options to drill down to various modes: https://explore.dot.gov/views/BorderCrossingData/Map?%3Aembed=y&%3AisGuestRedirectFromVizportal=y https://explore.dot.gov/views/BorderCrossingData/Map?%3Aembe... There are tabs at the top of the map with different views. Some are specific to this question.

seydor 3y ago

maybe they got bigger containers . Or just the cargo business is continuously deflating after the pandemic, which is hardly news

shyn3 3y ago

Recessions start when all the unions get their new contracts. 2024 is going to be detrimental for many people. Lots of job and property losses coming soon

alberth 3y ago

Both shipping & the manufacturing of corrugated boxes are leading signals to the health of the economy. Really hope we’re not approaching a downturn.

mistrial9 3y ago

people in the civilized West might have forgotten the long and standard history of slavery for labor. Rome was a slave state. Lots of post-Rome empires have traded slaves. Slaves do labor. Many of the comments here immediately and unequivocally supporting management are a reminder that the veneer of civility is soon lost when money is at stake.

mattas 3y ago

There's an interesting narrative forming in global trade around nearshoring/reshoring. The framing is often around manufacturing moving from China to Mexico. News like this supports that narrative. While it's somewhat clear that manufacturing is moving out of China, it's less clear where it's going.

hipadev23 3y ago

Flexport still probably making 50 offers a day so they can rescind them the following week

Racing0461 3y ago
Is flexport an "industry plant"? I see them posting here literally every month saying they are hiring and on linkedin but never anything more than that.

ggrothendieck 3y ago

The HN news title seems inaccurate. This is not necessarily a drop in demand nor is it applicable to all shipping as also suggested by the title. The article suggests it is an oversupply of container ships with very few ships scrapped as opposed to demand: "The industry invested heavily in new container ships during and after the pandemic to meet strong demand and benefit from record freight rates. A large number of new ships entered the market since the summer with no signs of idling or scrapping, said Clerc." Furthermore just because container ships were over ordered does not mean that other types of ships were so it is misleading to just refer to shipping in the title. It should be "container shipping".

CherylBlaikie 3y ago

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camila45 3y ago

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tpmx 3y ago

The 2022 annual report says 110k+ employees. The 2021 annual report says 95k+ employees. The 2020 annual report says 80k+ employees. Seems like they have acquired quite bit in the past few years, e.g.: https://www.freightwaves.com/news/shipping-giant-maersk-continues-buying-spree-after-best-quarter-ever https://www.freightwaves.com/news/shipping-giant-maersk-cont... Shipping giant Maersk continues buying spree after best quarter ever (November 2021)

windmark 3y ago
Indeed similar to all Big Tech companies laying off the past year.
ekianjo 3y ago
Seems like a regression to the normal
TeMPOraL 3y ago
Surprised to see steady increase in recent years. What are the 2019 numbers? 2020 and 2021 are the pandemic years, and Maersk should've been one of the most heavily impacted companies in the early months.
- tpmx 3y ago
  Relatively stable around 80k for 2018 and 2019. It appears they have executed a strategy to become a vertically integrated end-to-end logistics company rather than just a container shipping company. Profits during the pandemic allowed them to accelerate the change. https://qz.com/2103412/maersk-is-no-longer-just-a-shipping-company https://qz.com/2103412/maersk-is-no-longer-just-a-shipping-c... (Have a look at that quarterly profit graph...)
  - hef19898 3y ago
    Maersk went hard into the 3PL and fulfillment business, includimg hiring quite a few people from Amazon. They are in a quite interesting position for that.

pbjtime 3y ago

This is thanks to everyone downloading cars. I hope you're happy with yourselves.

realclarkeg687 3y ago

𝐓𝐨 𝐚𝐜𝐡𝐢𝐞𝐯𝐞 𝐲𝐨𝐮𝐫 𝐠𝐨𝐚𝐥𝐬, 𝐬𝐞𝐞𝐤 𝐭𝐡𝐞 𝐚𝐬𝐬𝐢𝐬𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐚𝐧 𝐞𝐱𝐩𝐞𝐫𝐭. 𝐈𝐧 𝐦𝐲 𝐨𝐰𝐧 𝐞𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐞, 𝐈 𝐬𝐮𝐬𝐩𝐞𝐜𝐭𝐞𝐝 𝐦𝐲 𝐩𝐚𝐫𝐭𝐧𝐞𝐫 𝐨𝐟 𝐢𝐧𝐟𝐢𝐝𝐞𝐥𝐢𝐭𝐲 𝐛𝐮𝐭 𝐈 𝐥𝐚𝐜𝐤𝐞𝐝 𝐩𝐫𝐨𝐨𝐟. 𝐀𝐟𝐭𝐞𝐫 𝐫𝐞𝐬𝐞𝐚𝐫𝐜𝐡𝐢𝐧𝐠 𝐨𝐧𝐥𝐢𝐧𝐞, 𝐈 𝐝𝐢𝐬𝐜𝐨𝐯𝐞𝐫𝐞𝐝 𝐦𝐚𝐧𝐲 𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐢𝐬 𝐩𝐚𝐫𝐭𝐢𝐜𝐮𝐥𝐚𝐫 𝐞𝐱𝐩𝐞𝐫𝐭 𝐰𝐡𝐨 𝐡𝐞𝐥𝐩𝐞𝐝 𝐭𝐡𝐞𝐦 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐬𝐩𝐲𝐢𝐧𝐠 𝐦𝐢𝐬𝐬𝐢𝐨𝐧. 𝐄𝐧𝐜𝐨𝐮𝐫𝐚𝐠𝐞𝐝 𝐛𝐲 𝐭𝐡𝐞𝐬𝐞 𝐫𝐞𝐯𝐢𝐞𝐰, 𝐈 𝐜𝐨𝐧𝐭𝐚𝐜𝐭𝐞𝐝 𝐭𝐡𝐞 𝐡𝐚𝐜𝐤𝐞𝐫𝐬𝐩𝐲𝐭𝐞𝐜𝐡 (@) 𝐆𝐦 𝐚𝐢𝐥 𝐂 𝐨𝐦 𝐚𝐧𝐝 𝐡𝐞 𝐠𝐚𝐯𝐞 𝐦𝐞 𝐚𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐥𝐨𝐠𝐢𝐧 𝐝𝐞𝐭𝐚𝐢𝐥𝐬 𝐭𝐨 𝐚𝐜𝐜𝐞𝐬𝐬 𝐦𝐲 𝐩𝐚𝐫𝐭𝐧𝐞𝐫'𝐬 𝐩𝐡𝐨𝐧𝐞. 𝐓𝐡𝐢𝐬 𝐚𝐥𝐥𝐨𝐰𝐞𝐝 𝐦𝐞 𝐭𝐨 𝐯𝐢𝐞𝐰 𝐭𝐞𝐱𝐭 𝐦𝐞𝐬𝐬𝐚𝐠𝐞𝐬, 𝐜𝐚𝐥𝐥𝐬, 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩 𝐜𝐨𝐧𝐯𝐞𝐫𝐬𝐚𝐭𝐢𝐨𝐧𝐬, 𝐚𝐧𝐝 𝐡𝐞𝐫 𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧. 𝐖𝐢𝐭𝐡 𝐭𝐡𝐞 𝐞𝐯𝐢𝐝𝐞𝐧𝐜𝐞 𝐈 𝐠𝐚𝐭𝐡𝐞𝐫𝐞𝐝, 𝐈 𝐰𝐚𝐬 𝐚𝐛𝐥𝐞 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐧𝐞𝐜𝐞𝐬𝐬𝐚𝐫𝐲 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐢𝐧 𝐦𝐲 𝐥𝐢𝐟𝐞. 𝐈𝐟 𝐲𝐨𝐮 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐚𝐜𝐜𝐞𝐬𝐬 𝐲𝐨𝐮𝐫 𝐩𝐚𝐫𝐭𝐧𝐞𝐫 𝐩𝐡𝐨𝐧𝐞 𝐟𝐨𝐫 𝐬𝐩𝐲𝐢𝐧𝐠 𝐩𝐮𝐫𝐩𝐨𝐬𝐞, 𝐈 𝐡𝐢𝐠𝐡𝐥𝐲 𝐫𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝 𝐭𝐡𝐢𝐬 𝐞𝐱𝐩𝐞𝐫𝐭.

Arnold07 3y ago

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