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article imageAmerican Express to cut 4,000 jobs

By Bob Ewing     May 18, 2009 in Business
American Express plans to eliminate 4,000 jobs or approximately 6 per cent of its workforce; the weakened economy has caused higher customer defaults.
The company plans to save $800 million over the rest of 2009 and the cuts are one of the steps being taken to achieve this goal.
The recent cuts are in addition to 7,000 job cuts and an expected $1.8 billion of savings from a restructuring it announced in October.
American Express has been hurt by rising delinquencies among cardholders.
"We continue to be very cautious about the economic outlook," Chief Executive Kenneth Chenault said in a statement. He said the cost savings "will be reinvested in the business to make sure we can take competitive advantage of opportunities as the economy begins to rebound."
The company will, also, cut spending by $500 million on marketing and business development and $125 million on consulting and other services, travel and overhead.
Michael O'Neill, a company spokesman, said the "vast majority" of the earlier 7,000 job cuts have taken place, and that the latest cuts will take place over several months.
A regulatory filing shows in the first quarter, American Express's net income fell 56 percent from a year earlier, while the amount set aside for credit losses increased 49 percent.
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