AMERICAN Express to cut up to 5,000 more jobs, bringing total to nearly 7,000
Wednesday, July 18th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ American Express Co. said Wednesday it plans to cut 4,000 to 5,000 more jobs in a bid to cut costs amid a lingering economic slowdown.
The latest cuts at the financial and travel-related services company would be in addition to about 1,600 job cuts announced earlier this year, combining for a reduction of about 7 percent of American Express' worldwide work force of 88,850 at the end of 2000.
The company said it plans to take a big write-down on the value of its investment portfolio.
Kenneth I. Chenault, chairman and chief executive of American Express, said the actions were being taken ``to ensure that we're in a strong position to navigate through what we expect to be a longer period of economic weakness.''
American Express also said it expects its second quarter earnings will decline 76 percent from a year ago to $740 million, or 54 cents a share. That reflects a charge of $826 million before taxes to write down the value of its high-yield investment portfolio and losses on shifting its holdings to lower-risk securities.
The company expects earnings of 53 cents a share excluding the high-yield portfolio losses, matching the expectations of analysts surveyed by Thomson Financial/First Call. The company will announce second-quarter results on July 23.
The company said it would cut jobs in its technology group and continue to consolidate or outsource some processing activities. It also plans to relocate certain finance, operations and customer service functions to less expensive overseas locations.
American Express also is building its online travel operations to allow for further reduction of its work force.
American Express shares fell 93 cents to $37.85 in morning trading Wednesday on the New York Stock Exchange. Its stock has fallen more than 30 percent since the start of the year.