American Express Cutting Up to 6,500 Jobs

Share this article:
American Express Co. will eliminate 5,500 to 6,500 jobs in an effort to save about $180 million, with half of the cuts coming from its travel business, the company said yesterday.


Half of the affected staff has been notified, American Express said, and the rest will be notified in 2002. These job cuts follow the 7,700 announced earlier this year. American Express has eliminated nearly 14,200 jobs, or 15 percent of its work force, in 2001.


"The staff reductions are taking place primarily in the travel business and reflect the sharp slowdown in that sector since Sept. 11," the company said.


The layoffs are expected to produce pre-tax expense savings of $230 million to $260 million in 2002. In 2003, pre-tax savings are expected to be $290 million to $315 million.


American Express said that billed business volume in its Travel Related Services division has fallen since last year. However, it has picked up more than expected since the end of September. Billings dropped 14 percent in September, nearly 10 percent in October and about 6 percent in November, the company said.


"These declines reflect continued weakness within the corporate travel and entertainment category," the company said, "offset in part by relatively stronger consumer spending."


American Express also said that travel sales in October fell nearly 46 percent compared with a year ago. November sales fell 38 percent.


If trends continue, the company said, earnings per share for the fourth quarter are expected to be 34 cents to 36 cents.


"Fourth-quarter business volume will reflect the impact of the September 11 terrorist attacks on the financial markets, travel, corporate spending and the overall economy," American Express said.


Share this article:
close

Next Article in Opinions

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Opinions

Attention Marketing Consultants: Protect Yourselves

Attention Marketing Consultants: Protect Yourselves

A lot can go wrong when you're a marketing consultant—but there are plenty of ways to safeguard yourself if you're smart about it.

The Challenge of Changeable Customers

The Challenge of Changeable Customers

When it comes to behavioral targeting, I'm never surprised by the ads I'm served on my personal Mac.

Spoiled for Choice: Answers

Spoiled for Choice: Answers

Sterling Worldwide is hiring a new VP of sales and marketing. Should the CRM expert or the data person get the job? See what our readers has to say.