American Express to Cut 5,400 Jobs

by Tom Taulli | January 11, 2013 10:20 am

American Express to Cut 5,400 Jobs

AmericanExpressPromo American Express to Cut 5,400 Jobs[1]American Express (NYSE:AXP[2]) announced late Thursday that it will take a $400 million charge in the fourth quarter connected to the planned layoffs of 5,400 employees this year[3]. The announcement came as part of a preliminary report on its fourth quarter; AXP expects profits to drop 47% in the period.

The brunt of the cuts will come from the travel business. According to AmEx, the digital revolution — and the rise of operators like Priceline (NASDAQ:PCLN[4]) and Expedia (NASDAQ:EXPE[5]) — has changed how travelers book trips and make plans.

AMEX’s job cuts will come to about 8.5% of the work force. It’s the fourth major restructuring over the past decade, amounting to about 18,000 jobs[6]. But the latest move should help the company achieve its goal of keeping operating expense growth to less than 3%.

American Express reports earnings Jan. 17. AXP shares were up more than 1% early Friday.

Tom Taulli runs the InvestorPlace blog IPO Playbook[7], a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook[8]” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders[9].” Follow him on Twitter at @ttaulli[10]. As of this writing, he did not hold a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/06/AmericanExpressPromo.jpg
  2. AXP: http://studio-5.financialcontent.com/investplace/quote?Symbol=AXP
  3. planned layoffs of 5,400 employees this year: http://www.businessweek.com/news/2013-01-10/amex-profit-falls-on-costs-tied-to-5-400-job-cuts-at-lender
  4. PCLN: http://studio-5.financialcontent.com/investplace/quote?Symbol=PCLN
  5. EXPE: http://studio-5.financialcontent.com/investplace/quote?Symbol=EXPE
  6. 18,000 jobs: http://online.wsj.com/article/SB10001424127887324581504578234052700797198.html?mod=WSJ_hp_LEFTWhatsNewsCollection
  7. IPO Playbook: http://investorplace.com/ipo-playbook/
  8. How to Create the Next Facebook: http://www.amazon.com/gp/product/1430246472/ref=s9_simh_gw_p14_d0_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-3&pf_rd_r=0GRB6ZMCTYDZVNG7Q7NV&pf_rd_t=101&pf_rd_p=470938811&pf_rd_i=507846
  9. High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders: http://goo.gl/pR2F3
  10. @ttaulli: https://twitter.com/ttaulli

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