04 November 2008

Job cuts and salary freeze at Amex

American Express has announced plans to cut 7,000 jobs, or 10% of its global workforce, to cope with the economic crisis.

It said the reductions will occur Ã¢â¬Åâœacross business units, markets and staff groups primarily focusing on management and other positions that do not interact directly with customersÃ¢â¬~.

Amex is also freezing salaries for its managers for 2009 and implementing a hiring freeze for open positions.

It believes these actions will allow it to save $700 million in 2009.

A spokeswoman for the UK said there were likely to be fewer job cuts here than in other parts of the world.

"That's partly because we have a significant amount of people in customer facing roles in the UK, particularly in Sussex," she said.

Amex employs around 6,000 people in the UK, with around 4,000 based in Brighton and Burgess Hill.

The spokeswoman said some discussions have already started with UK staff.

"WeÃ¢â¬â¢re starting to go through the processes now, and these will continue for a few months into 2009. Of course, there are a number of regulations we have to follow."

Globally, Amex plans to save another $125 million by cutting expenses for consulting and other professional services, travel and entertainment, and general overhead.

A complete Ã¢â¬ËœreengineeringÃ¢â¬â¢ of the company, which also includes scaling back investment spending, is expected to save a total of around $1.8 billion in 2009.

Ã¢â¬ÅâœWe've been engaged for the past few months in an intensive, companywide review of priorities and staffing levels,Ã¢â¬~ said chairman and chief executive officer Kenneth I. Chenault.

Ã¢â¬ÅâœThe reengineering programme will help us to manage through one of the most challenging economic environments we've seen in many decades.

Ã¢â¬ÅâœIt will also put us in position to ramp-up investment spending as economic conditions improve so that we can take advantage of the substantial opportunities that will be available to us over the medium to long term.Ã¢â¬~

By Bev Fearis