The Danish company AP Moller Maersk A/S will lay off at least 10,000 employees worldwide due to reduced demand for container transportation, rising costs and lower prices, DPA and Reuters reported, citing Agerpres.

Maersk, one of the largest shipping companies in the world, with a market share of around 17%, transports goods for giants such as Walmart, Nike and Unilever.

From a total of 110,000 employees in January, the company will remain with fewer than 100,000 to cut its costs by $600 million in 2024.

The layoffs come as shipping slumps after booming during the pandemic. The sector reported strong gains from 2020 to 2022, but now container shipping costs have increased and demand has weakened following a global economic slowdown.

Maersk warned on Friday that profit in 2024 would be lower than previous estimates after reporting a sharp decline in sales and revenue in the third quarter of 2023.

“We are accelerating cost reductions to protect our bottom line”

“The shipping industry is facing declining demand and inflationary pressures on our cost base. Given the challenging period ahead, we are accelerating cost reductions to protect our financial performance,” said Maersk CEO Vincent Clerk.

On the Copenhagen Stock Exchange, the company’s shares fell 11.1% on Friday, to their lowest level in three years.

The Danish company expects global demand for sea container shipping to fall 2% this year due to lower consumer demand.

Maersk expects earnings before taxes, interest, depreciation and amortization (EBITDA) to be between $8 billion and $11 billion in 2023, compared to a record $36.8 billion in 2022.

In the third quarter of 2023, EBITDA fell to $1.9 billion from $10.9 billion a year ago, but slightly beat analysts’ estimates of $1.81 billion.