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American Express to cut 7,000 jobs

Global payments and travel firm American Express said it would cut 7,000 jobs — about 10 per cent of its workforce worldwide, reports

business Updated: Oct 31, 2008 00:46 IST

Global payments and travel firm American Express said on Thursday it would cut 7,000 jobs — about 10 per cent of its workforce worldwide. The move is expected to result in cost savings to the tune of $1.8 billion in 2009.

American Express is the latest entity to join a flurry of US companies — including financial services giant Citigroup, Goldman Sachs and beverages major Pepsico — eliminating of jobs. Moreover, the firm would be suspending management-level salary hikes for next year apart from freezing hiring for open positions.

The plan includes “reducing staffing levels and compensation expenses, cutting operating costs and scaling back investment spending”, American Express said in a statement.

The company has significant presence in India.

As part of the cost cutting initiatives, the firm would record a restructuring charge of about $370million to 440 million pre-tax in the fourth quarter.

“The charge is primarily associated with severance and other costs related to the elimination of approximately 7,000 jobs or about 10 per cent of the company’s worldwide workforce. The reductions will occur across business units, markets and staff ...,” the statement noted.