Amex Defaults On 7000 Jobs, Shares Rise

Are layoffs the key to jolting shares in this market?

Marketwatch: Highlighting that even some of the most creditworthy and wealthiest Americans are having trouble paying their bills, American Express Co. said Thursday that it’s cutting 10% of its staff, or about 7,000 people, in an effort to save money.

Also, American Express will suspend management salary increases in 2009, and institute a hiring freeze on open positions.

The Dow Jones Industrial Average component said it would take a pre-tax restructuring charge of up to $440 million against fourth-quarter results to cover job-cut expenses. Shares of American Express traded 2% higher in morning action.
The job cuts will be made across the company’s business units, American Express said.
…The credit crunch has made it harder for financial-services companies to package up and sell on, or securitize, the loans they make. That’s an important source of funding for American Express, which isn’t connected to a large bank, like rival credit-card issuers

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