Friday, 11 January 2013

Amex cuts 5400 jobs globally

American Express has detailed plans to cut over 5000 jobs, predominantly within the giant's travel business. This is mainly as a result of cost cutting and restructuring in order to deal with a "digital revolution".
Amex says that some of the losses will be offset, meaning that staffing levels will be between four per cent and six per cent down on the current total of 63,500 at the end of the year .

The global business travel unit will take the brunt of the losses as Amex seeks to respond to an environment in which customers increasingly use online channels and automated servicing tools.

The digitisation of services is also cited as a reason to continue the "reconfiguration of cardmember servicing and collections as we drive efficiency through our global scale and as more customers use online and mobile channels instead of paper and telephone".

Job losses will cut across all levels of seniority, businesses and staff groups and be spread proportionally between the US and international markets.

Amex stated that the move will cost around $287 million after tax in a fourth quarter restructuring charge.
In addition, the firm will take another $307 million after tax hit thanks to US cardholders redeeming rewards and various customer reimbursements.

After these charges, net income for the quarter was $637 million, or $0.56 per share, compared to $1.2 billion, or $1.01 per share the previous year, Fourth quarter consolidated total revenues net of interest expense were $8.1 billion, up five per cent from $7.7 billion a year ago.

Kenneth Chenault, chairman and CEO, Amex, says: "Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth."
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