American Express to cut 5,400 jobs, take charges in fourth quarter
(Reuters) - American Express Co said it would cut about 5,400 jobs, mainly in its travel division, and would take about $600 million in after-tax charges in the fourth quarter, which will halve its net income for the period.
The company said some of the cuts would be offset by new hiring but expects to reduce its workforce 4 to 6 percent by the end of 2013. It currently employs 63,500 people.
New York-based AmEx said the reductions would be spread proportionately between the U.S. and international markets.
"For the next two years, our aim is to hold annual operating expense increases to less than 3 percent," Chief Executive Kenneth Chenault said in a statement.
The company said it recorded a $287 million after-tax restructuring charge in the quarter. It also booked a $212 million charge to account for a larger number of customers redeeming the rewards they earn while using its cards.
AmEx also took a $95 million charge for cardmember reimbursements for transactions going back several years.
The company said cardmember spending grew 8 percent in the fourth quarter, the third straight quarter of single-digit growth after nine quarters of double-digit growth.
AmEx expects to report a profit of $637 million, or 56 cents per share, including the charges.
Excluding the items, the company estimates fourth-quarter adjusted net income at $1.2 billion, or $1.09 per share. Continued...