Amex makes big cuts to customer service facilities
American Express is planning major cuts in its global customer servicing network, with the loss of around 550 jobs.
What the credit card company referred to as “consolidation” will lead to a hefty restructuring charge that will impact fourth quarter results. Amex will take a Q4 charge of US$113m, or 6 cents a share, for severance payments related to the consolidation of customer service facilities.
Amex said the charge will lead to fourth-quarter net income of US$1.1bn, or 88 cents a share. Excluding the charge, the company said earnings would total 94 cents a share.
The company is closing a customer service facility in Greensboro, North Carolina. In addition, some of the activities carried out at a Spanish base in Madrid will be transferred to facilities in the UK and Argentina. Customer support for the Japanese card business will be transferred to Japan from Australia.
The restructuring will affect 3,500 positions, including the elimination of 550 jobs. Amex said it would try to relocate employees where appropriate.
Amex has now shed around 11,000 employees since the credit crisis. It has now started hiring again, and its currently has 59,200 employees, compared to the 66,000 global total at year-end 2008.
Amex said the cut in its service staff was due to a shift in customer transactions from its call centres to online and mobile channels.
In October, American Express said its third-quarter profit increased by 71%, beating analysts’ expectations, as cardholder spending rose by 14% and loss provisions fell.