Joining in the unhappy trend of mass layoffs, American Express announced Thursday that 10 percent of the credit card company’s work force will soon be cut due to the current economic crisis.
The credit card company said the reductions will amount to about 10% of its worldwide workforce and will result in a pretax charge of up to $440 million in the current quarter. But AmEx said the restructuring will ultimately generate a $1.8 billion cost benefit next year.
American Express said cuts will occur across all of the company’s business units, markets and staff groups, but will focus on management positions. The company is also suspending management level salary increases for 2009 and instituting a hiring freeze.
“The reengineering program we announced today will help us to manage through one of the most challenging economic environments we’ve seen in many decades,” said Kenneth Chenault, American Express CEO, in a statement.