American Express Plans 7000 Lay-offs to Cut Costs

November 1, 2008 · By Kalyani Mukherjee Filed Under Economy Tagged as: American Express, job cuts

American Express Co announced on Thursday that it intends to undertake a host of cost-saving measures including a 10% cut in workforce in an attempt to deal with bad loans and rising funding costs.

The decision of American Express to slash its workforce by 10% would mean a loss of 7000 jobs in the company’s biggest restructuring plan since 2001. the company also said in its announcement that the layoffs will lead to pre-tax restructuring fees of $370 million to $440 million in the fourth quarter. By cutting jobs, freezing hiring for open positions and suspending management-level salary raises for 2009, American Express hopes to save around $700 million in a year. the pruning of staff will take place across markets and business units and mainly apply to those managerial positions that do not directly deal with customers.

Among other cost-saving measures that the company plans to enforce are reducing travel and consulting expenses as well as scaling back investments. Overall American Express expects to generate around $1.8 billion next year by the implementation of various cost-saving policies. American Express is the fourth-largest credit card company in the United States and was one of the first to warn at the beginning of the year that consumer spending was slowing down and delinquencies were on the rise.

Share and Enjoy: