Dividends and Maersk to cut jobs in large scale reorganization

When you think about the global supply system, one of the most important aspects is the containers that move from manufacturing plants to trains to ship yards to ships to trucks to distribution points around the world. The biggest company in the container shipment is a Danish company called Maersk which has 20% or 1 in 5 containers shipped worldwide.

The company has grown to a variety of divisions and in a press release in early September the company announced it was reorganizing its operations. The company had been under pressure from investors to change from a conglomeration to a leaner more focused company.

The company had sold its oil and gas division to Total (the 4th largest oil and gas company in the world, headquartered in France) in 2017.

The company has many brands and its Damco freight forwarding business and Africa-focused carrier Safmarine will be interated into Maersk by the end of the year and the brands will cease to exist.

Maersk has 80,000 employees, between 26,000 and 27,000 will be affected but that does not mean most will lose their jobs. There will some consolidation into back offices and marketing.

Linking to dividend paying stocks, while those of us in North America pay more attention to North America headquartered stocks, investors around the world worry about the same things for companies around the world. Sometimes being a conglomerate is a wonderful thing, sometimes it is not. There is not magic solution but as long as a company is making profits and can pay a dividend, there are less concerns. When the company loses money as world conditions change, then investors around the world will examine is this that best solution? or could something for focused work better?

There are more questions than answers, till the next time – to raising questions.

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