Amex To Shed Up To 6,500 Jobs

unemployment, layoffs, economic gloom AP

Financial giant American Express, hit hard by the drop in travel following the Sept. 11 attacks, will eliminate 5,500 to 6,500 jobs.

The company also warned Wednesday that its earnings in the October-December period were likely to be in a range of 34 cents to 36 cents per share, below the 40 cents expected by analysts surveyed by Thomson Financial-First Call. A year earlier, earnings were at 50 cents.

It said the job cuts would cost $240 million to $280 million in severance fees and other restructuring charges in the fourth quarter.

In a separate economic development, the government reported that the U.S. trade deficit fell to $94.98 billion in the July-September quarter, the smallest in nearly two years, reflecting an American economy in recession and huge foreign insurance payments from the Sept. 11 terrorist attacks.

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The latest Amex layoffs come on top of 7,700 cuts previously announced this year. Altogether, the 13,200 to 14,200 jobs eliminated amount to a 15 percent reduction in the American Express staff, which totaled 88,500 at the start of 2001.

Cuts are taking place primarily in the travel businesses and reflect the sharp slowdown in that sector since Sept. 11, the company said in a statement. It added that about half of those to be laid off in the latest round already have been notified, with the balance to get pink slips in 2002.

"Travel is weak and likely will stay weak for quite a while," said Moshe Orenbush, an analyst at CS First Boston.

American Express said it expected to save up to $260 million in 2002 as a result of the latest cutbacks.


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