American Express to cut 7,000 jobs

October 31st, 2008 - 1:29 am ICT by IANS  

New York, Oct 30 (DPA) Credit card company American Express said Thursday it would cut 7,000 jobs, or nearly 10 percent of its workforce, amid rising defaults on payments.American Express hopes to save $1.8 billion in the next year through the cuts, which will come primarily through managers and others who do not deal with customers, and other measures.

The firm had long been shielded from the turmoil in financial markets because of its relatively wealthy customer base, but as the crisis has spread more customers have defaulted on their credit cards. Unlike rivals Visa and Mastercard, American Express keeps its debts on its books. The other firms’ risk is with the banks that issue their cards.

Last week, the company said earnings fell by nearly 25 percent in the third quarter.

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