Maersk to cut 10k jobs as shipping demand drops • Hacker News Board

Re: Maersk to cut 10k jobs as shipping demand drops

#11

Post by hliyan » Sat, Nov 04, 2023, 9:56 AM UTC

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

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.

Re: Maersk to cut 10k jobs as shipping demand drops

#12

Post by tpmx » Sat, Nov 04, 2023, 9:59 AM UTC

TeMPOraL wrote: post #10

tpmx wrote: post #2

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-cont... Shipping giant Maersk continues buying spree after best quarter ever (November 2021)

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.

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-c...

(Have a look at that quarterly profit graph...)

Re: Maersk to cut 10k jobs as shipping demand drops

#13

Post by Lev1a » Sat, Nov 04, 2023, 10:24 AM UTC

hliyan wrote: post #11

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

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.

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".

Re: Maersk to cut 10k jobs as shipping demand drops

#14

Post by mo_42 » Sat, Nov 04, 2023, 10:29 AM UTC

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

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.

Re: Maersk to cut 10k jobs as shipping demand drops

#15

Post by matwood » Sat, Nov 04, 2023, 10:58 AM UTC

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

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?

Re: Maersk to cut 10k jobs as shipping demand drops

#16

Post by gruez » Sat, Nov 04, 2023, 11:00 AM UTC

Lev1a wrote: post #13

hliyan wrote: post #11

Earlier quoted context omitted.

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.

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".

>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".

Re: Maersk to cut 10k jobs as shipping demand drops

#17

Post by mschuster91 » Sat, Nov 04, 2023, 11:05 AM UTC

mo_42 wrote: post #14

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

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…

> 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.

Re: Maersk to cut 10k jobs as shipping demand drops

#18

Post by mschuster91 » Sat, Nov 04, 2023, 11:06 AM UTC

ekianjo wrote: post #7

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

> Companies wonder why employees are not loyal Never heard any CEO wondering about that.

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.

Re: Maersk to cut 10k jobs as shipping demand drops

#19

Post by mschuster91 » Sat, Nov 04, 2023, 11:08 AM UTC

matwood wrote: post #15

salmonlogs wrote: post #6

> 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-prof... Really sad to see these companies make enormous record beating profits then months later do mass layoffs just to maintain better…

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?

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.

Re: Maersk to cut 10k jobs as shipping demand drops

#20

Post by gruez » Sat, Nov 04, 2023, 11:10 AM UTC

mschuster91 wrote: post #17

mo_42 wrote: post #14

Earlier quoted context omitted.

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…

> 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.

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.