American Express cutting 4,000 jobs this year
American Express Co will be cutting 4,000 jobs this year. The credit card company posted high quarterly expenses and provisions for bad loans, disappointing investors who had expected the company to be more disciplined.
The planned layoffs will affect around 6% of American Express’s 63,000 workforce. It is part of a broader restructuring plan to boost efficiency, according to company officials.
“The actions we are taking will impact over 4,000 people at a cost of $313 million in the quarter,” Chief Financial Officer Jeff Campbell said on a post-earnings conference call.
The job cuts will take place in the US and abroad.
Net income rose to $1.45 billion ($1.39 per share) in the fourth quarter, from $1.31 billion ($1.21 per share) the previous year.
Total revenue, net of interest expense, increased by 6.6 percent to $9.11 billion.
Despite revenue and profit increasing, the figures did not impress investors who had expected more from the credit card company, especially given the economic growth in the US and the fact that more consumers are now more financially stable.
Analysts surveyed by Thomson Reuters expected a profit of $1.38 a share on revenue of $8.53 billion.
Many also expected American Express to have a tighter grip on its expenses, however, the firm posted companywide expenses of $6.3 billion, up 6% when adjusted for foreign-exchange impacts, compared to the year before.
The company used a big part of the gain on the sale of its investment in Concur Technologies on restructuring initiatives, which resulted in a pretax charge of $313 million.
“A substantial gain allowed us to accelerate some critical initiatives: re-engineering to make American Express more efficient,” Mr. Chenault said in prepared remarks.
American Express shares fell by 2.3 percent to $85.62 in after trading hours.