American Express cuts staff amid dismal outlook
20 Jul 2001
Global financial services giant, the US-based American Express issued a profit warning. It has also said that that it would take charges of about $1.2 billion as a result of poor operations and the nearly 5,000 jobs it is retrenching, and faces a dismal outlook for the rest of the year and into 2002. These redundancies, costing the company $370 million, come on top of the 1,600 redundancies already affected by the company.
These actions, according to Kenneth Chenault, the new chairman of the financial services giant, are being taken to put the bank in a strong position that would enable it to navigate through a long period of economic weakness. Kenneth Chenault, chairman and chief executive, said, "The actions we announced...are being taken to ensure that we're in a strong position to navigate through what we expect to be a longer period of economic weakness."
A further charge of $826 million will be taken to cover write-downs in the high-yield portfolio of American Express Financial Advisors and losses associated with rebalancing the portfolio toward lower-risk securities.
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