Danish shipping giant A.P. Moller – Maersk on Friday reported a steep drop in revenue in the third-quarter, and said it would cut 10,000 jobs as it battles in a difficult market environment.

These measures will take place over the next months, in order to further decrease the workforce by 3,500 positions, with up to 2,500 to be carried out in the coming months and the remaining to extend into 2024. This will reduce the global workforce to below 100,000 positions, as Maersk reports.

While volumes were up in most segments and cost reductions improved results, rates continued to erode, in particular in Ocean, and are now close to 2019-levels.

“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base,” CEO of Maersk Vincent Clerc, said in a statement. “Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling,” he said.

As the market is expected to remain volatile, with profitability increasingly tested by the ongoing increase in supply in Ocean, A.P. Moller – Maersk said it aims to reduce the workforce below 100,000 from 110,000 in January this year, which will result in savings next year of $600m compared to this year.

An increased restructuring cost of $350m would mostly impact its 2023 financial performance, it said.

Maersk on Friday reported a sharp fall in third-quarter revenue in difficult market conditions, with a decrease in its third quarter 2023 results of $12.1bn compared to $22.8bn in the same period last year, and an Ebit margin at 4.4% impacted by lower freight rates and lower volumes.

Ebitda plunged to $1.9 billion in the third quarter from $10.9 billion a year earlier, due to lower revenue.

The company said it expects underlying Ebitda for the year at between $9.5 billion and $11 billion, and underlying Ebit between $3.5 billion and $5 billion.