NEW YORK — In a stark acknowledgment of the tough times ahead in the credit card industry, American Express Co. said Thursday that it planned to cut 7,000 jobs, or about 10% of its worldwide workforce, in an effort to slash costs by $1.8 billion in 2009.
The New York-based credit card issuer -- which has reported four straight quarters of profit declines as an increasing number of consumers struggle to pay off debt -- said it was also suspending management-level salary increases next year and instituting a hiring freeze.
The job cuts will be across various business units but will primarily focus on management, the company said.
Additionally, American Express said it planned to scale back investments in technology, marketing and business development, and streamline costs associated with some rewards programs. The company also expects to cut expenses for consulting and other professional services, travel and general overhead.
American Express plans to take a restructuring charge of $240 million to $290 million in the fourth quarter.
Last week, American Express reported a 24% decline in third-quarter profit. The report echoed recent results from JPMorgan Chase & Co., Citigroup Inc. and Capital One Financial Corp.