71–80 of 176 posts
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Maybe they could cut everyone’s hours and keep more people employed? This would make surging to meet future demand spikes much more easy. Novel idea I know.
That's just going to cause all the high performers to jump ship (heh), because they can find a new job that doesn't have cut hours.
Or is that decreased demand for this company only?
> 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…
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.
Moreover, there is natural attrition. They can stop hiring, promote internally, and so on, until they’ve reached their desired head count.
The point is that both of these are doable when the company is wildly profitable. And they should be done for the negative secondary effects of layoffs (ruining lives, morale loss, people following their laid off friends out of the company, etc).
It seems like these days companies don’t even freeze hiring and grow competencies in house in times like these that much. They just assume (often wrongly) that they’ll quickly hire everyone they need once the demand picks up. But it takes years of training before an employee is fully integrated and has all the institutional knowledge to perform at their peak, and it takes many months to fill difficult positions.
Some people who have been around tech for a good number of decades have seen this fashionable layoff footgun used more than once.
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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...)
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.
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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.
>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…
- Spend it on labor
- Spend it on sales
- Spend it on R&D
- Fund capital improvements
- Save it in bonds
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.
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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.
Okay, but you can't expect companies to keep a buffer out of their own good will. You need the government to do it. Keeping such a buffer at a per company level probably is a bad idea too, because downturns tend to be sectoral. A bigger risk pool (eg. across industries) would be far more robust. Surprise! You just invented unemployment insurance!
better, Cheaper, and with out the political corruption that comes with all government programs.
Hell we just saw during COVID unemployment "insurance" being used as a political tool to essentially buy votes, by all political parties and organizations. Also used a tool to make authoritarian control of the population palatable
Further How many dystopian novels have the trope of the masses being paid not to work...
The axiom of a "social safety net" is apt but not the the way people using it believe it to be, the social safety net in practice tends to be like a fishing net, once you get entangled in it, you rarely escape it...
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So are you suggesting they should not have hired those workers, and left that customer demand stay unsatisfied, with all the knock-on consequences for workers in other sectors? These kinds of policies just lead to ossification of the economy. We need dynamic, responsive economies that can adapt to conditions, and we need strong protections for worker's rights and support for citizens through economic adjustments. The…
>I'm owed fair compensation for my work, and reasonable notice and compensation if I'm let go, which has happened. You're not owed either of these things. The way you write is curious. You don't really seem like someone who needs to work for a living, but you're trying to portray yourself as labor and not capital in your posts. Or you are against your own self-interests, which is illogical.
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> you might as well say management must be able to see the future. Arguably they can't have ignored that a surge this big would be temporary... It's not like we suddenly discovered a massive amount of resources at our disposal to produce the goods they are transporting. EDIT: It's frankly amazing to see how much has been projected onto my comment. For the sake of transparency towards the neoliberal police, I quoted w…
So are you suggesting they should not have hired those workers, and left that customer demand stay unsatisfied, with all the knock-on consequences for workers in other sectors? These kinds of policies just lead to ossification of the economy. We need dynamic, responsive economies that can adapt to conditions, and we need strong protections for worker's rights and support for citizens through economic adjustments. The…
No, I only answered to the previous commenter who wrote that management can't predict the future. They knew it was coming, and increasing temporarily the headcount was their plan.
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> The earnings Maersk has posted reflect the past. The mass layoffs reflect the future of the company (i.e., less demand in the future). If I draw parallels to personal finance, say I have a record high profitable year, would I rather assume my profits stay record high in the future and increase spending/investments OR would I ensure I have enough rainy day funds for the next inevitable slowdown (at least give me eno…
By cutting now they are building that emergency fund. They see demand dropping back to pre-COVID levels or worse. They haven't cut employees that far yet though. Your analogy can also work here. When I have a record year I might add some extra services to my life. I see that changing and cut the services before it's a huge problem.
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"Do you suggest they keep employees around with nothing to do because of significantly reduced shipping demand?" Management should be fired for miscalculated headcount instead.
Yes, let's set the minimum requirement for management at being able to predict the future. But then what? Do you start adjusting for in two years now, risking failure? Or later? Not every company can afford ridiculous salaries and headcounts until the next VC funding round comes through.
Now there's 2 parts of management. There's accounting, processing orders, filling out whatever government forms need filling out, keeping up to date with new regulations, ... Sometimes this is called accounting, but generally it's called management. They're not who we mean.
But then there's management, like the C-suite. Who "set direction". Their ONLY job, like shareholders, is to predict the future. That's literally their only function.
So yes, firing them because they misjudged required headcount doesn't sound even a little bit unreasonable.
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So are you suggesting they should not have hired those workers, and left that customer demand stay unsatisfied, with all the knock-on consequences for workers in other sectors? These kinds of policies just lead to ossification of the economy. We need dynamic, responsive economies that can adapt to conditions, and we need strong protections for worker's rights and support for citizens through economic adjustments. The…
> So are you suggesting they No, I only answered to the previous commenter who wrote that management can't predict the future. They knew it was coming, and increasing temporarily the headcount was their plan.
I don't like job cuts neither, but shipping is directly linked to the global economy. And if we go into a slow down, shipping demand slows down as well. Head count at Maersk is directly linked to that demand, so there are only so many options on the table.
Shipping goes through these cycles on a regular basis, not adjusting would put all jobs at risk. The real tragedy is, that a signifocant chink of those affected are under paid crew members and blue collar workers from countries without social security nets, whose families depend on their pay checks. And working on a Maersk vessel easily beats the quasi slavery on some fishing vessels by light years.