American Express to Cut 5,400 Jobs

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

[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.

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