Thursday, October 30, 2008

American Express to Cut 7,000 Jobs


As part of a reengineering plan, American Express plans to cut some 7,000 jobs, or about 10% of its work force, the company said Thursday morning.

The company will cut staffing levels, reduce compensation, lower operating costs, and scale back its investment spending. "We've been engaged for the past few months in an intensive, companywide review of priorities and staffing levels," said Kenneth Chenault, chairman and chief executive at American Express. "The reengineering program we announced today will help us to manage through one of the most challenging economic environments we've seen in many decades. It will also put us in position to ramp-up investment spending as economic conditions improve so that we can take advantage of the substantial opportunities that will be available to us over the medium to long term."

The company said that it would also suspend management-level salary increases for 2009 and implement a hiring freeze for open positions. These moves are expected to result in cost savings of about $700 million in 2009. The job cuts do not affect employees who deal directly with customers, American Express added.

In all, the company hopes to save $1.8 billion in 2009. American Express said that it would record a pretax charge of about $370 million to $440 million during the fourth quarter. The entire press release can be read here (link).

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10 comments:

Anonymous said...

Very nice!I wish and hope they will end bankrupt!

GlobCredit.com said...

Anon, don't think that will happen, but I understand where you're coming from. Many customers have suffered the wrath of American Express.

I imagine there will be more layoffs before this is all done.

Cosmos Human said...

I only wonder how many low paid CS reps will be terminated and will AMEX now employ third world calling centers?

GlobCredit.com said...

According to the press release, this move does not affect customer service jobs.

The Lion said...

First CL now jobs....I wish those former Amex employees good luck in this credit market. And prior to adding Amex to their resume, I suggest they find out if their interviewer got burned :) Lol

GlobCredit.com said...

Lion, hey, good point. That would be one of my first questions. So, you were burned by Amex? You were? Oh, well, I think they've done the consumer wrong. Haha.

The Lion said...

Hey in this job market, you bond withe the interviewer however you can. And hey, who can't bond over a shared distaste for Amex's policies?

GlobCredit.com said...

Absolutely. Do what you have to do.

TheVibeRAIDER said...

"I wish those former Amex employees good luck in this credit market. And prior to adding Amex to their resume, I suggest they find out if their interviewer got burned"

The head-hunter gets hunted!

In another forum of mine, someone complained about the laziness of some workers. I responded, "Well, who hired them in the first place?"

GlobCredit.com said...

Yep. Who hired them? Good question.

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