Amex To Cut 550 Positions, Impact 3,500 In Restructuring

American Express said it would eliminate 550 positions but impact 3,500 this year as part of a restructuring approved last month. "The decision reflects an overall decline in service volumes as more and more routine transactions have migrated to online and mobile channels," according to a company statement.

Amex said it would close a Greensboro, N.C., customer service center by year-end and move work to existing facilities in Fort Lauderdale, Phoenix and Salt Lake City. It also announced plans to move work from its Madrid, Spain, service center to Brighton, U.K., and Buenos Aires, Argentina, and move service support for the Japanese card business from Sydney, Australia, to Japan.

Amex cited a net job loss of 550 positions, but added, "because the re-engineering initiatives involve relocating work to different locations, approximately 3,500 existing positions would be impacted." Officials were not able on short notice to describe the relative impact on Amex's business travel versus payment businesses.

According to a published report in Greensboro's News-Record, Amex told Greensboro community leaders that it had 1,900 employees in the area and expected 400 to continue with the company and work from home. The newspaper reported that Robert Garinger, Amex senior vice president and general manager, told community leaders that Amex remained committed to the community and is "making over a billion-dollar capital investment in the construction of a new data center in Greensboro."

As transactions have moved online or to mobile platforms, "staffing levels have declined to reflect those lower volumes, largely by not filling positions that opened up when employees leave. The reduced staffing levels have created significant vacancy levels in some facilities and, as a result, real-estate-related costs are inconsistent with anticipated needs," according to the company.

Amex said it would report fourth-quarter restructuring charges of $113 million, primarily for "severance-related payments." The company said it also expected $60 million to $80 million in additional charges in 2011 and annualized savings of approximately $70 million starting in 2012. After recognizing the fourth-quarter charges, Amex said it expected next week to report quarterly net income of $1.1 billion, 48 percent more than a year ago.

"Strong growth across all business segments helped raise fourth quarter and 2010 cardmember spending to record levels," said Amex chairman and CEO Kenneth Chenault. "Despite an uneven economic environment, credit quality trends also continued to improve with key indicators for the quarter now back to--or better than--historical levels. This improved credit quality translated into lower provision expenses for the quarter."