American Express Friday said it expects to record a fourth-quarter pretax charge of up to $120 million and cut 2,000 jobs related primarily to a restructuring of its business travel unit and the sale of some overseas banking operations.
The charge is not expected to have a material impact on the company’s quarterly net income since it also expects to record a gain associated with its previously announced sale, American Express said in a filing with regulators.
The announcement comes as the New York-based credit card provider continues to pare down its overseas commercial banking operations and move more of its business travel services online.
Of the 2,000 job cuts, up to 400 could be transferred to the future acquirers of certain commercial banking operations in Bangladesh, Egypt and and Pakistan as well as the previously announced sale of its private banking operations in Luxembourg.
A company spokesman declined to detail the remaining job cuts, though a majority are expected to occur within American Express’ business travel unit, which grew significantly after it purchased Philadelphia-based Rosenbluth International last year.
With more business travelers deciding to arrange their trips online, however, American Express has invested heavily in beefing up its technology capabilities in that area, a spokesman said.
American Express also plans to relocate its U.K. finance center to other areas.
The restructuring charge, which will likely tally between $100 million and $120 million, includes severance payments of between $80 million and $90 million, the company said.
Once the restructuring is completed, American Express estimates it will result in pretax benefits of more than $75 million annually.
