Amex closes business travel call centers amid further job cuts


American Express this week announced a plan to eliminate about 4,000 jobs—6 percent of its global workforce—as part of a new initiative projected to generate $800 million in cost savings for the rest of the year.

As part of the reductions, American Express Business Travel this month is closing business travel call centers in Dickinson, N.D., and Greensboro, N.C., which housed a combined 212 employees, according to a spokesperson. Earlier this year, the company closed its Linton, N.D., call center affecting 46 employees.

eTN Chatroom: Discuss with readers from around the world:

A company spokesperson said, “In this prolonged economic downturn, American Express Business Travel continues to feel pressures and challenges with respect to operating against significantly lower volumes, smaller margins and the need to remove additional costs and expenses. Our decision to reduce our staffing levels was made in proportion to the volume of work we are managing and in line with reengineering activities American Express Company has announced. While our investments in technology have allowed us flexibility to shift volumes among our travel counselors in response to the ebb and flow of transactions, less work to perform leaves the business with little choice other than taking the necessary steps to consolidate our operations.”

Through the new savings plan, the company expects to shed $175 million through job cuts, $500 million in marketing and business development expenses and $125 million in operating costs. Amex’s latest cost reduction move is in addition to the $1.8 billion effort announced last fall.

American Express first announced its intent to implement further cuts during last month’s first-quarter earnings call, in which the company reported a 37 percent year-over-year decrease in global corporate travel sales to $3.4 billion. During the quarter, net income decreased 56 percent year-over-year to $437 million, while revenues net of interest expense declined 18 percent to $5.9 billion

“While we have remained solidly profitable at a time when some parts of the card industry were incurring substantial losses, we continue to be very cautious about the economic outlook and are therefore moving forward with additional reengineering efforts to help further reduce our operating costs,” said chairman and CEO Kenneth Chenault in this week’s statement. “We believe these efforts will put us in a better position to remain profitable and free up some additional resources that will be reinvested in the business to make sure we can take competitive advantage of opportunities as the economy begins to rebound.”