Thursday saw the American Express laying off around 7000 employees following the ongoing economic crisis. This crisis which is the worst in the last seven decades has forced this iconic firm to take this drastic step.
According to American Express, those who are wealthy and highly credit worthy are also unable to keep up their bill payments and this situation has forced them to lay off 10 percent of their employees, freeze new recruitment and suspend future salary increase in the management level.
American Express follows other big companies’ moves. Companies like Whirlpool, Goldman Sachs, Yahoo and HewlettPackard have recently let go five to ten percent of their staffs.
Goldman has announced a cut of 3200 jobs while Whirlpool retrenched at least 5000 employees. Yahoo sent home 1000 employees and Hewlett sent a stunning 24,000 people out of job.
Following the bankruptcy of Lehman Brothers, around 26,000 of its employees are expected to be sent out of job worldwide. According to American Express, all its business units across the country will face job cuts. This is one of the most challenging economic situations faced by us in the last few decades according to Ken Chenault, CEO of the American Express.
American Express is dependent on various financial services companies for funding and the current credit crunch has made it difficult for these companies to secure the loans. Even as American Express allotted funds to cover bad debts, their net income in the third quarter fell by almost 24 percent. According to analysts, the credit crisis will impact the credit card industry to a great extent.
