American Express to cut 5,400 jobs or 8.5% of staff

LOS ANGELES (AP) — American Express said Thursday that it will slash about 5,400 jobs, mainly in its travel business, as it seeks to cut costs and transform its operations as more of its customers shift to online portals for booking travel plans and other needs.

The job cuts will be partly offset by jobs that the company expects to add this year.

American Express said the jobs eliminated will span employee seniority levels and divisions worldwide, but will primarily involve positions that do not directly generate revenue for the company.

All told, the company anticipates that staffing levels will end up between 4 and 6 percent lower this year than in 2012. The company currently has 63,500 employees.

"Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth," said CEO Kenneth Chenault.

Shares slipped 29 cents to $60.50 in after-hours trading. They ended regular trading up 53 cents at $60.79.

American Express said it will book an after-tax charge of $287 million due to the restructuring. It's also recording $212 million in expenses related to reward points for its cardholders and roughly $95 million in customer reimbursements and other costs.

The combined charges will reduce American Express' fourth-quarter net income by 46% from a year earlier.

The company projects net income of $637 million, or 56 cents per share, compared with net income of $1.2 billion, or $1.01 per share, in the same quarter of 2011.

Excluding one-time items, fourth-quarter 2012 earnings amount to $1.2 billion, or $1.09 per share, ahead of analysts' consensus forecast of $1.06 per share, according to FactSet.

Revenue rose 5% to $8.1 billion. Analysts expected $8.01 billion.

The company is scheduled to report full results next Thursday.

Overall American Express has done well after the recession, as upscale shoppers have spent freely. That's because Amex cardholders are in general about a third more affluent than other credit card holders.

Through the first nine months of 2012, revenue grew 5 percent, while net income rose 3%.

Spending by cardholders jumped 8 percent in the fourth quarter, despite some softening early in the period due to Superstorm Sandy, the company said.

Chenault noted that, since the recession, American Express has been consistently gaining market share.

Despite that success, he said the company must embrace new technologies, become more efficient and position itself to invest in growth opportunities in a marketplace that's increasingly becoming defined by consumers' use of the Internet and mobile technology.

To that end, American Express' restructuring plan calls for overhauling its travel business to cut costs and invest in ways to cater to a growing volume of customers turning to online and automated tools to make their travel arrangements.

"One outcome of this ongoing shift to online is that we can serve a growing customer base with lower staffing levels," Chenault said during a call with analysts.

The company also will reconfigure its cardholder servicing and collections operations to focus more on online and mobile, rather than telephone and mail.

"The overall restructuring program will put us in a better position as we seek to deliver strong results for shareholders and to maintain marketing and promotion investments at about 9 percent of revenues," Chenault said.

Morgan Stanley Job Cuts: Bank Plans To Slash 1,600 Jobs In Investment Banking Unit

Morgan Stanley plans to cut 1,600 jobs in its investment banking unit, roughly 6 percent of staff in that unit, with employees being informed about job losses beginning this week, a person familiar with the matter said on Wednesday.

The cuts will affect traders, salespeople and bankers in Morgan Stanley’s institutional securities business as well as support staff, the source said.

This round of job cuts comes in addition to a 6 percent reduction in the investment bank workforce in 2012, said the source, who was not authorized to speak publicly about the matter.

About half of the job cuts will occur in the United States, with the rest affecting international units, said the source, adding that all levels of staff will be affected, with an emphasis on more senior employees.

Citigroup to Cut 11,000 Jobs

Citigroup’s announcement that it will slash 11,000 jobs worldwide underscores its major contraction since nearly collapsing during the financial crisis and its continuing battle against high operating costs and persistently sluggish markets.

The cost-cutting fervor, including tens of thousands of Wall Street jobs slashed in recent years, is expected to continue at Citigroup and other banks as they combat sagging stock prices, lackluster revenue and new regulations that damp profits.

The cuts at Citigroup, many coming from its global consumer banking business, reflect a new emphasis on aiming at commercial banking jobs, some bank analysts said, rather than mainly eliminating investment banking positions.

With pressure mounting from shareholders, Citi has been trying to bolster returns, in part by working through a glut of bad loans and systematically dismantling some businesses. The job cuts amount to 4 percent of the work force and will bring the company’s head count down to about 250,000, down by a third since before the financial crisis in 2007.

HSBC Cut 30,000 Jobs in Last Two Years

HSBC has reduced its number of staff by almost 30,000 in the last two years and said more job cuts are likely across the bank to achieve its cost efficiency targets.

The bank had 266,700 staff at the end of September, down from 296,000 at the end of 2010 and down about 21,000 this year.

HSBC Chief Executive Stuart Gulliver said about 15,000 of the reduction were due to disposals by the bank and he expected more cuts before the end of 2013 to improve cost efficiency. "We are probably likely to see the headcount reduce further...in terms of the organic reduction, there's still some way to go," he told reporters on a conference call.

Gulliver said in May 2011 he would cut about 30,000 jobs as part of a restructuring plan.