Feb 17 (Reuters) – American Express Co said it would overhaul its management, streamline its marketing operations and cut jobs as it looks to reduce $1 billion in costs over the next two years.
The company is facing stiff competition in the co-branding business and has lost lucrative long-term contracts from companies such as Fidelity Investments and warehouse club operator Costco Wholesale Corp.
The credit card issuer, which said it would cut jobs as part of the restructuring program, did not give any details about the number of employees it plans to lay off.
“At this time, we do not know what the magnitude of those reductions will be, as decisions on specific positions affected are yet to be made,” AmEx Chief Executive Kenneth Chenault said.
The company also said Chief Marketing Officer John Hayes will leave the company after over 20 years of service.
AmEx said it was consolidating its marketing operations to avoid duplicate infrastructure, resources, costs and processes. (Http://amex.co/1Q1LfaR)
The company is creating a global marketing operations unit, which will be led by Mike McCormack.
Shares of the company were marginally up in afternoon trading. Up to Tuesday’s close, the stock had fallen 23.5 percent, making it the worst performing stock on the Dow Jones index.