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German shipping giant Hapag-Lloyd will close its Global Capability Center in Izmir , Türkiye, eliminating approximately 300 jobs as the company cites Türkiye's unprecedented inflation rates as making operations financially unsustainable.
The closure was announced Thursday through the company's internal system, with layoffs to be implemented in stages over roughly one year. Current operations will be transferred to Hapag-Lloyd's facility in Kuala Lumpur, Malaysia, according to a source who spoke to Türkiye Today.
CIO and CHRO Donya-Florence Amer and Senior Managing Director for the South Europe region Juan Pablo Richards informed Izmir colleagues of the decision during a town hall meeting Thursday. The executives affirmed that the closure would be "implemented in a phased and fair manner, allowing a smooth transition."
"We very much value the commitment, the passion and the excellent work our colleagues in Izmir have shown over the last years," Amer stated. "The decision to close the GCC in Izmir is solely based on the unfortunate development of the Turkish economy with inflation rates which are very hard to bear for an international company like ours."
Hapag-Lloyd committed to supporting affected employees through the transition, ensuring they have sufficient time to explore new opportunities within or outside the company. The leadership thanked all Izmir-based GCC colleagues "wholeheartedly for their passionate and great work in the past years."
According to an internal company memo obtained by Türkiye Today, Türkiye's inflation crisis reaching extraordinary levels rendered Hapag-Lloyd's operations uncompetitive. Memo claimed the twelve-month moving average inflation was 72% in 2022, 54% in 2023, and 58% in 2024. In 2022 and 2023, Türkiye had the sixth highest inflation worldwide, rising to fifth place globally in 2024.
The prolonged inflationary period led to heavily increased costs for Hapag-Lloyd over the years, becoming unsustainable for future operations. Company analysis determined that despite attempts to optimize costs and mitigate consequences of the unfavorable economic outlook, maintaining competitive operations in Türkiye was no longer viable.
After thorough analysis and consultation with experienced advisors, Hapag-Lloyd determined that a new structure was essential to drive future success of its Global Capability Centers worldwide. The company concluded that its worldwide GCCs must remain cost-efficient to survive.
According to company memo, Hapag-Lloyd will focus on existing operations in Chennai and Mumbai, which can be run with competitive costs. The company will expand its presence in Kuala Lumpur, where it identifies opportunities for further growth and the ability to remain competitive in the region.
The company described the change as "not a cutback in tasks to our GCCs, but rather a strategic evolution, positioning them to take on more responsibilities and drive growth." Leadership expressed confidence that the new structure represents "a significant step forward in our journey to create more agile, efficient, and valuable GCCs that will drive business growth and excellence."
Hapag-Lloyd characterized the closure as part of reshaping its worldwide Global Capability Centers to drive future growth and success rather than simple cost reduction. The decision came after the company tried its utmost to optimize costs and mitigate consequences of Türkiye's unfavorable economic outlook over recent years.
The inflationary development in Türkiye was described as "exceptionally high" in recent years, creating a hurtful development that led to heavily increased costs for the international shipping company. Company leadership emphasized the decision was not taken lightly, but economic conditions had made continued operations untenable.
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