American Express to slash $1 billion in costs


Credit-card issuer American Express (AXP) announced plans Wednesday to restructure its management, reduce jobs and cut $1 billion in costs over the next two years.

Shares of American Express rose 43 cents, or 0.8%, to $53.61 Wednesday. Shares have lost about a third of their value over the past year.

American Express’ restructuring comes amid a difficult time for the company, as it not only competes with Visa (V) and MasterCard (MA), but also faster-growing non-conventional payment companies like PayPal (PYPL) and Square (SQ). American Express’ adjusted profit per-share fell 11.5% in the fourth quarter to $1.23 a share.

American Express’ changes, announced in a memo from CEO Kenneth Chenault, attempts to fix problems by “streamlining our organization,” “reengineering key cross-business processes,” and “leveraging policy changes.”

Already in 2014, the company cut 14% of headcount to 54,000 as of the end of December 2014. The company has not yet released its 2015 headcount.


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