Amex not doing so nicely

US credit card lender American Express has unveiled plans to reduce its workforce by 10 percent in order to save $1.8 billion by the end of 2009.  ┬á Around 7000 jobs will be cut, mostly at management level or in areas which do not deal directly with customers. Amex also announced a recruitment freeze and the suspension of next year's management pay rises. Spending on travel, consulting and entertainment will also be cut. ┬á┬á Amex said the changes were necessary because of "the most challenging economic conditions in decades." Last week the company reported a 24 percent drop in third-quarter profit to $861 million. The proportion of bad debts written off by Amex has doubled from 3 percent last year to 6.1 percent.┬á┬á Official figures released by the Commerce Department Thursday showed consumer spending had shrunk at an annual rate of 3.1 percent between July and September, the first contraction since 1991. ┬á┬á "The re-engineering program ... will also put us in a position to ramp-up investment spending as economic conditions improve," said Amex chairman and chief executive Kenneth Chenault. ┬á┬á However, the plans will cost the company up to $440 million in the fourth quarter, it said, mostly due to redundancy payments. ┬á┬á Amex said it also intends to reduce its budget for technology and marketing, so at least there may be less junk mail in our mailboxes.  ┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á