American Express in a Friday filing with the Securities and Exchange Commission announced it will cut approximately 2,000 jobs across its business travel, American Express Bank and finance groups in a trio of restructuring initiatives.
The December downsizing follows American Express Business Travel's October 2004 announcement that the division will pursue a global integration of online and offline services under the leadership of new chief operating officer Priyan Fernando
(BTN, Oct. 25). While some of the job cuts are due to the online push and corporate restructuring, Amex senior vice president Mike O'Neill said that part of the decision could be attributed to further consolidation in the wake of last year's Rosenbluth acquisition.
"The gist of what is happening is that we're doing more and more business online and that is something that many business travel customers look for," O'Neill said. "At the same time, we're operating that whole part of the business in a way that's efficient and trying to keep costs in line so that we can provide the best possible level of service to our customers."
O'Neill added that the decision to eliminate jobs across the company was made in different stages over the past quarter, and that employees in the affected areas had been told about the move over the past several months.
"The way that we're moving forward with the restructuring is designed to make sure that there is no disruption in service and we can continue to service customers both on the phone and online," he said.
In the SEC filing, Amex noted it expects to incur a fourth-quarter, pre-tax charge of roughly $100 million to $120 million, $80 million to $90 million of which will likely go toward employee severance obligations. Still, when the restructuring initiatives are completed by the end of 2005, Amex anticipates annual pre-tax benefits of over $75 million.