Container shipping giant A.P. Moller-Maersk (MAERSK A.DENMARK & MAERSK B.DENMARK) is set to slash jobs as its profit takes a significant hit.

Maersk reported its third-quarter earnings before interest, taxes, depreciation, and amortization (Ebitda) at $1.9 billion on revenue of $12.1 billion. However, both figures fell short of analysts’ estimates. The company’s Q3 performance represents a stark decline compared to the same period in 2022 when Maersk recorded a quarterly profit of $10.9 billion on $22.8 billion in revenue.

Vincent Clerc, Maersk’s CEO, commented on the current challenges faced by the industry, stating, “Our industry is facing a new normal with subdued demand, prices back in line with historical levels, and inflationary pressure on our cost base.” He attributed the recent drop in prices to overcapacity across most regions and noted a lack of significant improvement in ship recycling or idling.

Following the disappointing results, Maersk’s shares plummeted more than 12% during Copenhagen trading on Friday.

The slowing global macroeconomic environment, combined with shifting geopolitical dynamics such as protectionism and supply-chain adjustments, are adding further pressure. As a key player in global shipping, Maersk’s performance acts as a reliable indicator for the state of global trade—and the outlook is bleak.

Maersk has adjusted its forecast for global container volumes, expecting a decline between 0.5% and 2% for 2023. While this is slightly more optimistic than its previous prediction, the company now anticipates its full-year results to fall at the lower end of its previous projections. The annual underlying Ebitda range remains unchanged at $9.5 billion to $11 billion.

To confront the noticeable slowdown, Maersk is implementing cost-cutting measures, including workforce reduction. The company has already reduced its headcount from 110,000 in early 2023 to approximately 103,500. Furthermore, it announced on Friday that it plans to cut an additional 3,500 positions.

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