US credit card giant American Express has announced that it will cut 4,000 jobs or six percent of its worldwide workforce amid rising write-offs of credit card debt as card-holders, hit by unemployment, find it difficult to make their payments.
AFP - US credit card giant American Express announced Monday that it was to shed some 4,000 jobs as part of an 800-million-dollar restructuring of its global operations.
The job cuts would lead to the elimination of about six percent of the company's current worldwide workforce, and the company also planned to scale back investments and slash operating costs.
The move comes after AmEx last month reported a 56 percent drop in quarterly earnings from a year ago to 443 million dollars, or 31 cents per share, amid rising write-offs of credit card debt.
American Express said the job cuts, which will go into effect this year, would allow them to shave 175 million dollars off their budget, while reducing investments on marketing and business development would save another 500 million dollars.
The rest of the savings would come from cutting 125 million dollars from operational costs, chairman and chief executive Kenneth Chenualt said.
"While we have remained solidly profitable at a time when some parts of the card industry were incurring substantial losses, we continue to be very cautious about the economic outlook," Chenualt said in a statement.
"We believe these efforts will put us in a better position to remain profitable and free up some additional resources that will be reinvested in the business to make sure we can take competitive advantage of opportunities as the economy begins to rebound."
American Express is a leading credit company which was founded in 1850 and now operates in 130 countries around the world.
Date created : 2009-05-19