Amex to start retrenchment drive

Amex to start retrenchment driveUS credit card and banking giant, American Express is likely to start retrenchment drive in India and other locations. It would retrench about 10 percent workforce, cutting around 7,000 jobs. The staff would be eliminated in all business units, including markets and staff groups. Some staff in its Indian operations is also likely to be laid off.

The company announced on October 30 in New York that it would employ cost reduction measures to produce benefits of $1.8 billion in 2009. It has decided to reduce staff members, operating cost and spending as a part of its reengineering drive. American Express has also dropped the idea of salary increase of its management level staff for 2009. It would save approximately $700 million in 2009 by suspending salary increase of top level staff and compensation related decisions.

Meanwhile, the staff of Amex in India is under tension fearing loss of their jobs. The retrenchment drive by various companies is also politically dangerous for the center government as the general elections are approaching in India.