American Express Co., announced that it will slash 5,400 jobs this year as a part of its restructuring effort and to offset losses.
The company reported a 47 percent drop in fourth-quarter profit and after-tax charges totaled up to $594 million, which include severance costs and the future redemptions of credit card rewards estimates, said AmEx in a statement.
Its fourth-quarter net income declined to $637 million from $1.19 billion a year earlier, reports Bloomberg. Adjusted profit with one-time items excluded, was $1.09 a share, 3 cents more than the average estimate of 27 analysts surveyed by Bloomberg.
The layoffs, which will be offset by some new hiring, will reduce the company's total workforce of 63,500 by 4 to 6 percent by the end of the year, according to The New York Daily News.
Nearly $300 million of the charges will cover the restructure, mostly in its travel section, to save money and adapt to the fact that customers rely on online bookings and on their mobile phones instead of with travel agents, Reuters reported.
"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," said chief executive Kenneth Chenualt in a press statement. "For the next two years, our aim is to hold annual operating expense increases to less than 3 percent."
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