American Express has outlined plans to "consolidate locations" within its global servicing network, cutting its workforce by around 550 positions and leading to a $113 million restructuring charge that will hit fourth quarter results.
The card firm is shutting a site in Greensboro, North Carolina, with its work transferred to other US locations. There are also plans to move work currently handled in Madrid to Brighton, UK and Buenos Aires, Argentina, while service support for the Japanese card business will move from Sydney to Japan.
Overall, headcount will fall by 550 but because the "reengineering initiatives" involve relocating work to different locations, about 3500 existing positions will be affected.
Amex says it will record fourth quarter charges of $113 million, or $74 million after-tax, or $.06 per share. There will also be additional charges in 2011 of $60 million to $80 million.
The firm now expects to report quarterly net income of $1.1 billion, or $.88 per common share on 24 January. However, starting in 2012 the move should see savings of around $70 million a year, some of which will be reinvested.
The cuts reflect an overall decline in service volumes as more and more routine transactions have migrated to online and mobile channels, claims Amex. This has led it to stop filling roles when staff leave, meaning facilities are operating under capacity and real-estate-related costs too high.