American Express Co said on Thursday that it would slash about 5,400 jobs, mainly in its travel business, as it seeks to cut costs and transform its operations as more of its customers shift to online portals for booking travel plans and other needs.
The job cuts will be partly offset by jobs that the company expects to add this year.
American Express said the jobs eliminated will span employee seniority levels and divisions worldwide, but will primarily involve positions that do not directly generate revenue for the company.
All told, the company anticipates that staffing levels will end up between 4 and 6 percent lower this year than last year. 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,” chief executive Kenneth Chenault said.
American Express said that it would book an after-tax charge of US$287 million due to the restructuring. It’s also recording US$212 million in expenses related to reward points for its cardholders and roughly US$95 million in customer reimbursements and other costs.
The combined charges will reduce American Express’ fourth-quarter net income by 46 percent from a year earlier.
The company projects net income of US$637 million, or US$0.56 per share, compared with net income of US$1.2 billion, or US$1.01 per share, in the same quarter of 2011.
Excluding one-time items, fourth-quarter earnings last year amounted to US$1.2 billion, or US$1.09 per share, ahead of analysts’ consensus forecast of US$1.06 per share, according to FactSet.
Revenue rose 5 percent to US$8.1 billion. Analysts expected US$8.01 billion.
Separately, General Motors (GM) says a new information technology center in suburban Atlanta — the third of four planned by the largest US automaker — will open in March and create 1,000 white-collar jobs as part of its new focus on producing software and other applications in-house.
The automaker announced on Thursday that it is hiring software developers, project managers, database experts, business analysts and other information technology professionals to staff its Information Technology Innovation Center in Roswell — about 16km north of Atlanta.
State officials say the company has invested US$26 million in the development and are calling it another step toward establishing the area as a hub for technological innovation.
General Motors vice president and chief information officer Randy Mott said on Thursday that the company has relied on outside firms for tech products and applications for about 30 years. The 21,181m2 Roswell facility — along with centers in Warren, Michigan; Austin, Texas; and a to-be-named fourth location — will be part of GM’s effort to hire up to 10,000 technology professionals over a three to five-year period to move production in-house instead of buying from outside companies.
“We feel like based on what we’re trying to do, which is provide capability for our business, it’s much better to have people that understand not only technology but General Motors and the General Motors business,” Mott said after a news conference at Georgia Tech.
About 700 people have been hired for positions at GM’s other two innovation centers.