American Express to cut 7,000 jobs

Looks like the start of financial news will be on the down side again today. American Express is in the news today announcing layoffs of 7,000 people.
Let's see here now, everyday this week a company has announce layoffs. Sooner or later there won't be anyone working. I mean this is outrageous, is anybody job secure anymore?

In a stark acknowledgment of the tough times ahead in the credit card industry, American Express Co. said Thursday that it plans to cut 7,000 jobs, or about 10 percent of its worldwide work force, in an effort to slash costs by $1.8 billion in 2009.

The New York-based credit card issuer said it is 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 positions, the company said.

Additionally, American Express said it plans to scale back investments in technology and 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 entertainment and general overhead.

As a result, American Express plans to take a restructuring charge of between $240 million and $290 million in the fourth quarter.

The company has been gearing up for a big restructuring for some time, first announcing in July that it planned to reduce overall costs and staffing levels, and take a related charge during the second half of the year.

"We've been engaged for the past few months in an intensive, companywide review of priorities and staffing levels," said Kenneth I. Chenault, chairman and chief executive, in a statement. "The re-engineering program we announced today will help us to manage through one of the most challenging economic environments we've seen in many decades. It will also put us in position to ramp up investment spending as economic conditions improve so that we can take advantage of the substantial opportunities that will be available to us over the medium to long term."

Last week, American Express reported a better-than-expected 24 percent decline in third-quarter profit. But the report echoed recent results from JPMorgan Chase & Co., Citigroup Inc. and Capital One Financial Corp. showing that the credit card environment is worsening as cardholders have trouble paying off debt and pull back their spending.

Even a company like American Express, which prides itself on catering to a more well-heeled clientele, is not immune.

The company's customers tend to be more affluent than those of other card companies, but they are more heavily concentrated in California and Florida, where the slumping housing market is taking a toll. American Express also has a higher percentage of small-business customers, and small businesses tend to miss payments more than individuals, executives have said.

"Cardmember spending is likely to remain soft," Chenault said in a statement last week. "Loan growth will be restrained, in part because of the steps we are taking to reduce credit risks, and credit indicators are likely to reflect the continued downturn in the economy and throughout the housing sector."

American Express has been able to finance its operations amid the tight credit markets, but the efforts have been tougher and more costly.

Shares rose $1.23, or 4.9 percent, to $26.44 in morning trading. Shares have traded between $20.50 and $61.55 in the past 12 months.

Whirlpool to cut 5,000 jobs by end of 2009

Looks like there's going to be some unhappy people come next year. Whirlpool has just announce they're cutting 5,000 jobs by the end of 2009.

5,000 jobs? That's alot of people soon to be out of work! Just as I thought I wouldn't read about any layoffs today, here comes Whirlpool making headlines. I tell you, I never would have thought things would get this bad.

Companies are going under, unemployment is skyrocketing, it just won't stop. There has to be light at the end of this tunnel. To many people are losing there jobs, now this is something I'm reminded of daily. Let's keep our fingers crossed and wish for the best in 2009.

Whirlpool Corp. said Tuesday it will cut about 5,000 jobs by the end of 2009 because of the global credit crisis and its expectation for continued reduced demand in North America and Europe.

The nation's largest home appliance maker also reported that its earnings fell 7 percent during the third quarter on lower global unit volumes and higher material costs. Whirlpool lowered its earnings outlook for the year.

"The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy," Jeff M. Fettig, chairman and chief executive, said in a release. "Declining home values, rising unemployment and very low consumer confidence levels will likely prolong a negative demand environment at least through the middle of 2009."

The Benton Harbor, Mich.-based company earned $163 million, or $2.15 per share, for the quarter, compared with $175 million, or $2.20 per share, a year earlier.

Revenue for the three-month period, which ended Sept. 30, edged up to $4.9 billion from $4.8 billion.

Analysts surveyed by Thomson Reuters anticipated, on average, earnings per share of $1.69 on revenue of $5 billion.

Whirlpool said the drop in profit reflects significantly higher material and oil-related costs and lower industry demand. U.S. industry unit shipments of major appliances declined 11 percent in the quarter.

Whirlpool said it now expects a profit of $5.75 to $6 per share for 2008, compared with its previous estimate of $7 to $7.50 per share.

Based upon its revised earnings expectations and the glum industry outlook, the company said it now expects to generate free cash flow of $50 million or less for the full year, well down from its previous estimate of $500 to $550 million.

Because of this and the economic conditions, the company has suspended its $500 million share-repurchase program announced in April.

The job cuts include positions being eliminated from plant closings that the company already announced this year along with new reductions taking place now and through the end of next year. Whirlpool, whose brands include Maytag, KitchenAid and Jenn-Air, said it has 73,000 employees worldwide.

Since January, Whirlpool previous announced the closure of four plants in LaVergne, Tenn.; Oxford, Miss.; Puebla, Mexico; and Reynosa, Mexico -- a loss of about 2,000 jobs.

The company said it also will shutter its facility in Jackson, Tenn., and shift production from there to its plant in Findlay, Ohio, eliminating about 500 positions.

It also will cut approximately 500 salaried jobs throughout North America, including both full-time and contractor positions.

Another approximately 1,900 jobs will be cut overseas, mostly in Europe.

The cuts are expected to produce annual savings of $275 million, Whirlpool said. It now anticipates restructuring expenses of approximately $170 million in 2008 compared with its previous estimate of $100 million.

"While decisions to eliminate jobs and close facilities are very difficult, they are necessary to create a cost-effective business structure," Fettig said. "These changes will ensure that our company is proactively taking the necessary steps to adjust its cost structure and production capacity to lower expected demand levels."