American Express Announces Revamping and Job Cuts

The job cuts will be partly offset by jobs that the company expects to add this year.

American Express said the jobs to be eliminated would span employee seniority levels and divisions worldwide, but would primarily involve positions that did not directly generate revenue for the company.

All told, the company anticipates that staffing levels will end up 4 to 6 percent lower this year than in 2012. The company currently has 63,500 employees.

“Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth,” the company’s chief executive, Kenneth I. Chenault, said in a statement.

American Express said it would book an after-tax charge of $287 million because of the restructuring. It is also recording $212 million in expenses related to reward points for its cardholders and roughly $95 million in customer reimbursements and other costs.

The combined charges will reduce American Express’s fourth-quarter net income by 46 percent from a year earlier.

The company projects net income of $637 million, or 56 cents a share, in contrast to net income of $1.2 billion, or $1.01 a share, a year earlier.

Excluding one-time items, fourth-quarter 2012 earnings amount to $1.2 billion, or $1.09 a share, ahead of analysts’ consensus forecast of $1.06 a share, according to FactSet.

Revenue rose 5 percent to $8.1 billion. Analysts expected $8.01 billion.

The company is scheduled to report its full results next Thursday.

Article source: http://www.nytimes.com/2013/01/11/business/american-express-announces-revamping-and-job-cuts.html?partner=rss&emc=rss