Amex cuts 75 Minneapolis jobs
Dee DePass
Star Tribune
Thursday, June 14, 2001
American Express Financial Advisors is joining the list of investment firms laying off scores of employees as it battles the economic downturn and a tumultuous Wall
Street.
A companywide memo issued Wednesday announced that 100 customer service employees will lose their jobs. About 75 of those workers will be in Minneapolis and 25 in
Salt Lake City. The workers serve retail and online brokerage clients and financial advisers.
Amex has 8,000 Financial Advisors employees in Minnesota, 2,700 of whom are customer-service workers. About 900 were just hired in 1999 and early 2000 when the
business was booming. Reduced demand on the investment front has decreased work and call volumes this year.
"We're still up net 800 jobs and that is a plus. But volume, given what it is, could not support all those [new] jobs," said company spokesman Tom Joyce.
The affected workers were notified late Tuesday.
Amex has eliminated a few jobs previously this year, but this is the largest number of layoffs it has announced in more than five years, Joyce said. About 23 local jobs were
eliminated during the fourth quarter when the firm stopped distributing products through third-party broker-dealers. Most of those workers landed other jobs inside the
company.
American Express reduced hiring and shifted workers from some customer-service areas to backlogged departments during the first quarter. Some of the workers being
laid off now are expected to find other jobs within the company. Those who have not landed elsewhere after eight weeks will receive severance packages.
Further layoffs are possible. "What we don't know with 100 percent certainty is what the economy and financial markets will do over the next several months. We will
continue to make staffing adjustments to accommodate fluctuating work volumes," the memo said.
In April, American Express CEO Ken Chenault and Financial Advisors head Jim Cracchiolo told employees that they didn't expect companywide layoffs but said "there
could be job reductions in some areas."
Amex joins U.S. Bancorp Piper Jaffray, Charles Schwab, Merrill Lynch and other investment houses in reducing staff in response to this year's difficult securities markets.
In April, Financial Advisors reported a 79 percent drop in net income from $245 million to $51 million for the first quarter.
The New York City-based parent also reported a drop in quarterly earnings and said it is "unlikely to meet its earlier target of 12 percent" growth in earnings per share.
American Express stock closed Wednesday at $41.52, down 28 cents.
-- Dee DePass is at ddepass@startribune.com .
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