Yesterday, American Express announced it would be slashing 5,400 jobs, primarily from its travel services business. This amounts to 8.5 percent of its 63,500 employees.
American Express is the number one credit card issuer in terms of purchases. But AmEx is also a significant factor in the travel business, providing consumers with travel advice and bookings. The company's cuts come as a result of changes caused by what it calls the "digital revolution", the consumer movement to booking travel online.
"Against the backdrop of an uneven economic recovery, these restructuring initiatives are designed to make American Express more nimble, more efficient and more effective in using our resources to drive growth," said American Express CEO Kenneth Chenault said in a statement.
The credit card business had a relatively healthy fourth quarter, with cardmember spending up 8 percent versus year-ago levels.