Shipping giant Maersk has announced plans to cut an additional 3,500 jobs as a result of lower freight rates and demand. This comes after the company already cut 6,500 roles earlier this year. Maersk, which transports goods for major retailers like Nike, reported a 92% drop in profits in its most recent quarterly results. The cost of shipping goods had initially surged when lockdowns lifted and businesses resumed trading, leading to congestion and logistical problems at UK ports. However, high inflation and rising interest rates have since curbed spending and dampened demand. Maersk expects the job cuts to save the company £600 million next year.
Maersk’s CEO, Vincent Clerc, stated that the shipping industry is facing a “new normal” with subdued demand and prices returning to historical levels. He also noted the pressure on rates in recent months and the lack of improvement in ship recycling or idling. The job losses will bring Maersk’s global workforce below 100,000, with 2,500 roles being cut in the coming months and the rest in 2024. The company has not disclosed the locations or types of roles that will be affected.
The latest results from Maersk suggest a slowdown in the global economy. As one of the world’s largest container shipping companies, Maersk is seen as an economic bellwether. The current situation in container shipping is worsened by overcapacity in the industry, which benefits those paying for transportation but negatively impacts ship owners and operators.
The cost of shipping has significantly decreased in recent months, with one container now costing about $2,000 compared to $18,000 a year ago. This has allowed retailers like The Entertainer to lower prices for consumers. Following the announcement of job cuts, shares in Maersk fell by 11.1%. The company maintains its revenue and profit expectations but warns that a slowing global economy and geopolitical tensions could impact future performance.
Original news source: Maersk cuts 10,000 jobs as shipping demand falls (BBC)
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Group or Classroom Activities
Warm-up Activities:
– News Summary
Instructions: In pairs, students will read the article and create a concise summary of the key points. They should focus on the main ideas, important details, and the overall impact of Maersk’s job cuts on the global economy. Afterward, each pair will share their summary with the class.
– Opinion Poll
Instructions: Students will form small groups and discuss their opinions on the following question: “Do you think the job cuts at Maersk are a result of temporary factors or do they indicate a more long-term problem in the shipping industry?” Each group will then conduct a poll within their group and record the results. Finally, each group will present their findings and the reasons behind their opinions to the class.
– Vocabulary Pictionary
Instructions: Each student will be given a vocabulary word from the article related to the shipping industry, such as “congestion,” “logistical,” or “overcapacity.” Without using words, students will have to draw a picture that represents the meaning of their assigned word. The class will then try to guess the word based on the drawings.
– Keyword Taboo
Instructions: In pairs, students will take turns describing a keyword from the article to their partner without using the word itself or any of its derivatives. The partner must try to guess the keyword based on the description. This activity will help students practice paraphrasing and using alternative vocabulary.
– Pros and Cons
Instructions: Students will brainstorm and discuss the pros and cons of the job cuts at Maersk from different perspectives. They can consider the impact on the company, its employees, the global economy, and the shipping industry as a whole. Afterward, each student will share their viewpoint and reasoning with the class.
Comprehension Questions:
1. What is the reason behind Maersk’s plans to cut 3,500 jobs?
2. How much did Maersk’s profits drop in its most recent quarterly results?
3. What initially caused congestion and logistical problems at UK ports?
4. According to Maersk’s CEO, what are the current challenges facing the shipping industry?
5. How many jobs will be cut in the coming months, and when will the rest be cut?
6. What impact does the overcapacity in the industry have on ship owners and operators?
7. How much has the cost of shipping decreased in recent months?
8. What factors does Maersk warn could potentially impact its future performance?
Go to answers ⇩
Listen and Fill in the Gaps:
Shipping giant Maersk has announced plans to cut an additional 3,500 jobs as a result of lower freight rates and (1)______. This comes after the company already cut 6,500 roles earlier this year. Maersk, which transports goods for major retailers like Nike, (2)______ a 92% drop in profits in its most recent quarterly results. The cost of shipping goods had initially surged when lockdowns (3)______ and (4)______ resumed trading, leading to congestion and logistical problems at UK ports. However, high inflation and rising interest rates have since curbed spending and dampened demand. Maersk expects the job cuts to save the (5)______ £600 million next year.
Maersk’s CEO, Vincent Clerc, stated that the shipping industry is facing a “new normal” with subdued demand and prices (6)______ to historical levels. He also noted the pressure on rates in recent (7)______ and the lack of improvement in ship (8)______ or idling. The job losses will bring Maersk’s global workforce below 100,000, with 2,500 roles being cut in the coming months and the rest in 2024. The company has not disclosed the locations or types of roles that will be (9)______.
The (10)______ results from Maersk suggest a slowdown in the global economy. As one of the world’s largest container shipping companies, Maersk is seen as an economic bellwether. The current situation in container shipping is (11)______ by overcapacity in the industry, which benefits those paying for (12)______ but negatively impacts ship owners and operators.
The cost of shipping has significantly decreased in recent months, with one container now costing about $2,000 compared to $18,000 a year ago. This has allowed retailers like The Entertainer to lower prices for (13)______. (14)______ the announcement of job cuts, shares in Maersk fell by 11.1%. The company maintains its revenue and profit (15)______ but warns that a slowing (16)______ economy and geopolitical tensions could impact future performance.
Go to answers ⇩
Discussion Questions:
Students can ask a partner these questions, or discuss them as a group.
1. What is the impact of lower freight rates and demand on shipping companies like Maersk?
2. How would you feel if you were one of the employees affected by the job cuts at Maersk?
3. Do you think the shipping industry will recover from the “new normal” of subdued demand and historical price levels? Why or why not?
4. What do you think are the main factors contributing to the overcapacity in the container shipping industry?
5. How do you think the decrease in shipping costs has affected retailers and consumers?
6. Do you believe that geopolitical tensions will have a significant impact on the future performance of shipping companies like Maersk? Why or why not?
7. What measures do you think shipping companies can take to address the challenges they are currently facing?
8. How do you think the job cuts at Maersk will affect the global economy as a whole?
9. Have you ever experienced any logistical problems or delays with shipping goods? If so, how did it impact you or your business?
10. Do you think the decrease in shipping costs will have a positive or negative long-term impact on the shipping industry? Why or why not?
11. How do you think the job cuts at Maersk will impact the morale and motivation of the remaining employees?
12. What role do you think technology and automation will play in the future of the shipping industry?
13. How would you feel if you were a ship owner or operator in the current overcapacity situation?
14. Do you think the decrease in shipping costs will lead to an increase in global trade? Why or why not?
15. What do you think can be done to address the issue of overcapacity in the container shipping industry?
Individual Activities
Vocabulary Meanings:
Match each word to its meaning.
Words:
1. Maersk
2. jobs
3. demand
4. profits
5. shipping
6. rates
7. economy
8. container
Meanings:
(a) The company that announced job cuts
(b) The desire or need for a product or service
(c) Positions or roles within a company
(d) The transportation of goods by sea or air
(e) The overall financial system of a country or region
(f) Financial gains or earnings
(g) The cost or price of shipping services
(h) A large metal box used for transporting goods
Go to answers ⇩
Multiple Choice Questions:
1. Why is Maersk planning to cut an additional 3,500 jobs?
(a) Higher profits and demand
(b) Increased congestion at UK ports
(c) Rising interest rates and inflation
(d) Lower freight rates and demand
2. How much did Maersk’s profits drop in its most recent quarterly results?
(a) 92%
(b) 82%
(c) 72%
(d) 62%
3. What is the expected cost savings from the job cuts?
(a) £500 million
(b) £600 million
(c) £400 million
(d) £300 million
4. According to Maersk’s CEO, what is the “new normal” for the shipping industry?
(a) Increased demand and higher prices
(b) Overcapacity and congestion at ports
(c) Subdued demand and historical price levels
(d) Rising interest rates and inflation
5. How many jobs will be cut in the coming months?
(a) 2,500
(b) 3,500
(c) 6,500
(d) 100,000
6. Why is the current situation in container shipping worsened?
(a) Decreased demand and prices
(b) Geopolitical tensions
(c) Overcapacity in the industry
(d) Lack of improvement in ship recycling
7. How much has the cost of shipping decreased in recent months?
(a) From $2,000 to $18,000
(b) From $18,000 to $2,000
(c) From $10,000 to $5,000
(d) From $5,000 to $10,000
8. What happened to Maersk’s shares following the announcement of job cuts?
(a) They rose by 11.1%
(b) They remained unchanged
(c) They fell by 92%
(d) They fell by 11.1%
Go to answers ⇩
True or False Questions:
1. Maersk expects the job cuts to save the company £600 million next year.
2. The job losses will bring Maersk’s global workforce above 100,000.
3. The company already added 6,500 roles earlier this year.
4. Maersk plans to add an additional 3,500 jobs due to lower freight rates and demand.
5. Maersk’s CEO, Vincent Clerc, stated that the shipping industry is facing a “new normal” with subdued demand and prices returning to historical levels.
6. The cost of shipping goods initially surged when lockdowns lifted, but high inflation and rising interest rates have since curbed spending and dampened demand.
7. Maersk reported a 92% drop in profits in its most recent quarterly results.
8. The cost of shipping has significantly increased in recent months, with one container now costing about $2,000 compared to $18,000 a year ago.
Go to answers ⇩
Write a Summary:
Write a summary of this news article in two sentences.
Writing Questions:
Answer the following questions. Write as much as you can for each answer.
1. What is the reason behind Maersk’s decision to cut an additional 3,500 jobs?
2. How much did Maersk’s profits drop in its most recent quarterly results?
3. What factors have contributed to the decrease in demand for shipping goods?
4. According to Maersk’s CEO, what challenges is the shipping industry currently facing?
5. How has the cost of shipping changed in recent months, and what impact has it had on retailers?
Answers
Comprehension Question Answers:
1. The reason behind Maersk’s plans to cut 3,500 jobs is lower freight rates and demand.
2. Maersk’s profits dropped by 92% in its most recent quarterly results.
3. The cost of shipping goods initially surged when lockdowns lifted and businesses resumed trading, leading to congestion and logistical problems at UK ports.
4. According to Maersk’s CEO, the current challenges facing the shipping industry include subdued demand, prices returning to historical levels, pressure on rates, and lack of improvement in ship recycling or idling.
5. 2,500 jobs will be cut in the coming months, and the rest will be cut in 2024.
6. The overcapacity in the industry negatively impacts ship owners and operators, as it leads to lower freight rates and less profitability.
7. The cost of shipping has significantly decreased, with one container now costing about $2,000 compared to $18,000 a year ago.
8. Maersk warns that a slowing global economy and geopolitical tensions could potentially impact its future performance.
Go back to questions ⇧
Listen and Fill in the Gaps Answers:
(1) demand
(2) reported
(3) lifted
(4) businesses
(5) company
(6) returning
(7) months
(8) recycling
(9) affected
(10) latest
(11) worsened
(12) transportation
(13) consumers
(14) Following
(15) expectations
(16) global
Go back to questions ⇧
Vocabulary Meanings Answers:
1. Maersk
Answer: (a) The company that announced job cuts
2. jobs
Answer: (c) Positions or roles within a company
3. demand
Answer: (b) The desire or need for a product or service
4. profits
Answer: (f) Financial gains or earnings
5. shipping
Answer: (d) The transportation of goods by sea or air
6. rates
Answer: (g) The cost or price of shipping services
7. economy
Answer: (e) The overall financial system of a country or region
8. container
Answer: (h) A large metal box used for transporting goods
Go back to questions ⇧
Multiple Choice Answers:
1. Why is Maersk planning to cut an additional 3,500 jobs?
Answer: (d) Lower freight rates and demand
2. How much did Maersk’s profits drop in its most recent quarterly results?
Answer: (a) 92%
3. What is the expected cost savings from the job cuts?
Answer: (b) £600 million
4. According to Maersk’s CEO, what is the “new normal” for the shipping industry?
Answer: (c) Subdued demand and historical price levels
5. How many jobs will be cut in the coming months?
Answer: (a) 2,500
6. Why is the current situation in container shipping worsened?
Answer: (c) Overcapacity in the industry
7. How much has the cost of shipping decreased in recent months?
Answer: (b) From $18,000 to $2,000
8. What happened to Maersk’s shares following the announcement of job cuts?
Answer: (d) They fell by 11.1%
Go back to questions ⇧
True or False Answers:
1. Maersk expects the job cuts to save the company £600 million next year. (Answer: True)
2. The job losses will bring Maersk’s global workforce above 100,000. (Answer: False)
3. The company already added 6,500 roles earlier this year. (Answer: False)
4. Maersk plans to add an additional 3,500 jobs due to lower freight rates and demand. (Answer: False)
5. Maersk’s CEO, Vincent Clerc, stated that the shipping industry is facing a “new normal” with subdued demand and prices returning to historical levels. (Answer: True)
6. The cost of shipping goods initially surged when lockdowns lifted, but high inflation and rising interest rates have since curbed spending and dampened demand. (Answer: True)
7. Maersk reported a 92% drop in profits in its most recent quarterly results. (Answer: True)
8. The cost of shipping has significantly increased in recent months, with one container now costing about $2,000 compared to $18,000 a year ago. (Answer: False)
Go back to questions ⇧
