Amex to Cut 7,000 Jobs
Further evidence of the economic contraction: American Express -- the largest U.S. credit card company by purchases -- said today it will cut 7,000 jobs and take up to a $290 million charge related to the cuts in a move designed to save $1.8 billion next year.
Earlier this year, Amex announced a "re-engineering" plan designed to cut costs as consumers cut back on their credit-fueled spending. The job cuts represent 10 percent of the company's global workforce.
The company also has frozen hiring and will cut back on marketing, it said in a statement.
“The re-engineering program we announced today will help us to manage through one of the most challenging economic environments we've seen in many decades," Amex chairman Kenneth I. Chenault said in the statement.
Wall Street liked the cuts, as it usually does: Shares of Amex are trading up 2.5 percent so far today. That's a nice change from the stock's performance over the past year -- shares of Amex have lost more than half of their value since this time last year.
What might the cuts mean to Amex cardholders? Well, there's this cryptic statement in the release: Some of the anticipated savings will come from "streamlining costs associated with some rewards programs." Though Amex said the cuts would come from parts of the company that do not interact directly with customers.
-- Frank Ahrens
By
Frank Ahrens
|
October 30, 2008; 10:51 AM ET
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Posted by: TomIII | October 30, 2008 12:37 PM | Report abuse
As much as I hate the loss of 7,000 jobs, I must say, AMEX is taking action itself, rather than holding its hand out for some of the bailout money...
So confused by companies paying dividends when they have accepted huge cash supplies from the bailout..I'm not getting any of MY investment money back. Aren't divendends or the lack there of a risk of investing?
Posted by: acjennings | October 30, 2008 1:05 PM | Report abuse
Amex is crook. They won a $2B lawsuit against Visa/Mastercard and now they lay off 7000 workers to save money?
Posted by: scooterlibre | October 30, 2008 1:06 PM | Report abuse
The collapse of credit card debt will be the second disaster for the economy (after foreclosures.) These hundreds of billions need to be de-leveraged.
Posted by: davidwayneosedach | October 30, 2008 1:20 PM | Report abuse
Wall Street celebrates as another 7,000 people join the growing ranks of the unemployed. Amex may think it's saving $1.2 billion but what it's really doing is sucking that much more money OUT OF THE ECONOMY, and it's that much less money in circulation for its customers to spend.
This economic meltdown we're having is the inevitable result of eliminating millions of good paying jobs with decent benefits. Unemployed people have no money to spend on goods and services, so that layoffs in one sector affect spending in all the rest. So what follows is bankruptcy and foreclosure, not economic growth. For all their hundreds of millions of dollars in salaries and perks, corporate CEOs are incapable of connecting the dots and why should they? They'll get their obscene salaries even if their companies go under.
Posted by: windrider2 | October 30, 2008 2:37 PM | Report abuse
It's going to be quite a ride. People shouldn't live with their families' futures impacted by poor management at the company they work at, the economy, Wall Street, etc. Don’t just accept what’s thrown your way. I’m not available for that and you don’t need to be either. www.LikeSoup.com
Posted by: jc2728 | October 30, 2008 2:51 PM | Report abuse
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Wall Street LOVES it when Amex cuts 7000 jobs.
Further proof that Wall Street is completely disconnected from Main Street.
Someday all these crooks will hang.