Nov

1

American Express Plans 7000 Lay-offs to Cut Costs

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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.

Oct

6

Job Losses Pile up in September

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The US economy is shedding jobs at the fastest pace in the last five years in a grim indication that the country is directly heading for a recession.

On Friday, the US Department of Labor released a report which put the number of jobs slashed in September at 159000, more than double the cuts made just a month ago. This was the ninth consecutive month of job losses and the present rate of job cuts is the highest since 2003. Till date almost 760000 jobs have been lost in this year alone.

Other figures from the Labor Department’s report reveal that the country’s rate of unemployment has climbed up to 6.1% from the much lower 4.8 % a year back. Moreover in the past one year, the number of unemployed people has increased by 2.2 million and now stands at 9.5 million. The unemployment rate among African-Americans stood at 11.4%, the highest since late 2003.

Many economists believe that despite the $700 billion bailout package for the finance sector, job losses will continue for some more time. Recession-like conditions could take the unemployment rate to even 7% in late 2009 before the situation turns around. All these concerns have made the economy the number one election issue as America votes for its next president in November.