Amex to slash up to 5,000 jobs

Amex blames the weak US economy for its performance

Financial services company American Express has said that it will slash 4,000-5,000 jobs because its business has been hit by the slowing US economy.

The actions we announced today 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

Kenneth I. Chenault
chairman of Ammex

The firm made the announcement as it warned that its second-quarter profits would fall by 76% from the $740m (£528m) it earned 12 months earlier.

In a written statement, the company said "American Express said that it believes that the economy will remain weak throughout this year and into 2002".

Restructuring charges, which include the expense of laying off workers, will cost the company up to $1.2bn, Amex announced.

Navigating the slowdown

The company has not yet given any indication of where the redundancies will fall.

The latest cuts are in addition to approximately 1,600 positions, which have been or are in the process of being eliminated.

"The actions we announced today 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," said Kenneth I. Chenault, chairman and chief executive of American Express.

The company has also said that it will make some changes to its investment portfolio by dropping more volatile holdings and reducing its exposure to individual companies and industry sectors.