American Express says it will eliminate 4,000 jobs
American Express said Monday it is eliminating about 4,000 jobs as part of a plan to slash another $800 million in costs for the remainder of the year. The layoffs represent about 6 percent of the credit card issuer's current global work force.business Updated: May 19, 2009 09:21 IST
American Express said Monday it is eliminating about 4,000 jobs as part of a plan to slash another $800 million in costs for the remainder of the year.
The layoffs represent about 6 percent of the credit card issuer's current global work force.
Many of the affected workers were notified in recent days and the remainder will be notified in coming weeks, company spokeswoman Joanna Lambert said.
Lambert could not specify how many U.S. workers would be laid off, but said the cuts will be across the board.
The newest plan follows $1.8 billion in cost cuts - including 7,000 layoffs - announced in October of last year. The company also suspended management-level salary increases and instituted a hiring freeze at the time.
As part of the newest cost-cutting plan, American Express also plans to scale back investment spending and make further cuts to operating costs, including professional services and travel.
"While we have remained solidly profitable at a time when some parts of the card industry were incurring substantial losses, we continue to be very cautious about the economic outlook and are therefore moving forward with additional reengineering efforts to help further reduce our operating costs," Kenneth I. Chenault, chairman and chief executive officer, said in a statement.
The deep cost cuts show that even a company like American Express, which prides itself on catering to a more affluent clientele, is not immune to the pullback in consumer spending.
The company's customers are more heavily concentrated in California and Florida, where the slumping housing market is taking a toll. American Express also has a higher percentage of small-business customers, and small businesses tend to miss payments more than individuals, executives have said.
For the first three months of the year, the company's profit fell 63 percent. It marked the sixth-straight quarter of profit declines.