American Express Business Travel, amid a companywide cost-cutting initiative, is taking a more cautious technology investment approach by reducing non-client-facing staff and closing infrastructure gaps in its global standardized call center operations in emerging markets.
Meanwhile, in the United States, the company plans to complete converting the Sabre and Apollo agent desktops to its internally developed Gateway agent workstations next year, according to American Express Business Travel COO Priyan Fernando.
With most of the call center and global technology infrastructure heavy lifting done, including converting to a common global distribution system in Australia, Canada, Mexico, the United Kingdom and the United States, the company now is "investing very judiciously," said Fernando.
"This is the time when we can gain marketshare, so we are not shying away from investing where there are opportunities," he said. "We are very pointed in the areas that we are investing in."
In late October, following a third quarter in which net income dropped 24 percent year over year, American Express announced plans to cut $1.8 billion in costs in 2009, including the reduction of 7,000 jobs or about 10 percent of the global workforce.
Other announced plans include reducing investment spending on technology, marketing and business development. The business travel division has begun staff reductions in several such non-client-facing areas as technology, marketing, finance and human resources.
While nearly all travel management companies are reviewing their staffing levels and operating expenses these days, Fernando said the company's completion of the global operations and services standardization
(BTNonline, Sept. 24, 2007) has put the company in a favorable position to handle slipping travel demand and a worsening economic climate.
"We always have to have flexibility in our expenses, and one of the reasons we invested in common platforms around the world was to create that flexibility where we can flex up and down depending on volumes," he said. "Because we now have the ability to transfer volumes from one center to the other, we have been able to thus far handle the reduction in volume, taking advantage of attrition and the flexibility of our workforce."
The company also experienced sliding global corporate travel sales in the third quarter, in which sales volume decreased 17.7 percent from the second quarter to $5.1 billion. To partially offset that, Fernando said, "We are very confident that we will meet new wins to about $3 billion."