Maersk, one of the world’s biggest shippers, announced November 3 that the company will be forced to lay off more than 10,000 people from its workforce.

According to CNBC, Denmark-listed shares in the shipping firm fell by 18% the day the announcement was made, hitting their lowest levels since October 2020.

Following the job cuts, Maersk’s workforce will be reduced from 110,000 employees in early 2023 to less than 100,000 people. The layoffs are expected to create $600 million in savings in 2024 when compared to 2023.

“Transportation demand [for Maersk] will be strong if the economy is going well, but the opposite will apply if there are clouds on the horizon,” said Russ Mould, the investment director of the British stockbroker services and online investment provider AJ Bell, in a note. “To make matters worse, normal industry dynamics in such a situation aren’t playing out as expected.”

Maersk maintained that its full-year EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance would still be between $9.5 billion and $11 billion, although the company expects its EBITDA to come in on the lower end of that range. The organization also reported a third-quarter revenue of $12.1 billion, down from $22.8 billion during Q3 2022.

“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base,” said CEO Vincent Clerc. He added that overcapacity across most markets had driven down the company’s prices.

Though the COVID-19 pandemic led to increased freight rates due to higher demand and supply chain issues, that trend has cooled recently, causing Maersk to accelerate its cost and cash containment measures Clerc explained.