American Express (NYSE:AXP) announced that they will be cutting 4,000. Improving operating efficiencies is a must for the company after the company announced their fourth quarter earnings.
Restricting the company will cost $313 million stated a company spokesperson. The first portion of this restructure will be 4,000 job cuts at an unexpected time for the company.
Company shares rose in the fourth quarter past the expected $1.38 to $1.39 a share raising profits by 11%.
Positive progress was spurred by the holiday season rush. However, the company’s foreign currency movements has forced a change in the company’s structuring. While the US dollar is rising, other global economies are struggling.
International operations are expected to be assessed during the first quarter which may lead to further job cuts in the future.
The company has stated that they expect to cut all 4,000 jobs over the year but has announced that they will be hiring as necessary. A company spokesperson has also stated that the 4,000 figure is just an estimate. Does this mean more jobs will be cut? No one knows for sure.
Tight budget controls are said to have helped the company’s healthy balance sheet in 2014. Jeffrey Campbell, the company’s CFO, stated that there was some complexity during the year. As the company restructures, they’re looking to turn to investments to spur further growth. Layoffs are a necessity at this point.
Starting the New Year, many other companies are also announcing cuts to their workforce.
Online auction powerhouse eBay (NASDAQ: EBAY) is facing similar struggles and has also announced layoffs of 2,400 people among their eBay and PayPal brands. Simplifying their workforce is the reasoning behind the company’s layoffs.
American Express is already seeing a negative impact from their announcement. After-hour trading figures have the company’s stock dipping as much as 2%.