American Express Cutting Up to 6,500 Jobs
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.