American Express to cut 5,400 jobs

(AP File Photo/Steven Senne) American Express Co. said that it will slash about 5,400 jobs, mainly in its travel business, as it seeks to cut costs and transform its operations as more of its customers shift to online portals for booking travel plans and other needs.

Layoffs ? The company will not reveal losses in individual locations.

American Express Co. says it will slash about 5,400 jobs, mainly in its travel business, as it seeks to cut costs and transform its operations as more of its customers shift to online portals for booking travel plans and other needs.

The job cuts will be partly offset by jobs that the company expects to add this year.

American Express said the jobs eliminated will span employee seniority levels and divisions worldwide, but will primarily involve positions that do not directly generate revenue for the company.

All told, the company anticipates that staffing levels will end up between 4 and 6 percent lower this year than in 2012. It has 63,500 employees, including about 2,000 at its American Express Care Center in Salt Lake City, which is part of a global network of customer-service centers serving 22 markets. Also in Utah, the company operates American Express Centurion Bank and American Express Bank FSB, which issue a range of card products to consumers and small businesses in the United States.

The company said it isn?t revealing the number of layoffs that will take place at its individual locations.

"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," said CEO Kenneth Chenault.

Shares slipped 29 cents to $60.50 in after-hours trading. They ended regular trading up 53 cents at $60.79.

American Express said it will book an after-tax charge of $287 million due to the restructuring. It?s also recording $212 million in expenses related to reward points for its cardholders and roughly $95 million in customer reimbursements and other costs.

The combined charges will reduce American Express? fourth-quarter net income by 46 percent from a year earlier.

The company projects net income of $637 million, or 56 cents per share, compared with net income of $1.2 billion, or $1.01 per share, in the same quarter of 2011.

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Excluding one-time items, fourth-quarter 2012 earnings amount to $1.2 billion, or $1.09 per share, ahead of analysts? consensus forecast of $1.06 per share, according to FactSet.

Revenue rose 5 percent to $8.1 billion. Analysts expected $8.01 billion.

The company is scheduled to report full results next Thursday.

Overall American Express has done well after the recession, as upscale shoppers have spent freely. That?s because Amex cardholders are in general about a third more affluent than other credit card holders.

Through the first nine months of 2012, revenue grew 5 percent, while net income rose 3 percent.

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Source: http://www.sltrib.com/sltrib/money/55613187-79/american-express-company-percent.html.csp

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