American Express (NYSE:AXP) said Wednesday it will take a $113 million charge in the fourth-quarter to pay severance for 550 employees being let go as part of its global restructuring.
The move follows AmEx’s decision to consolidate locations within its global servicing network, a reflection of overall declines in service volumes as routine transactions continue to migrate online, an issue that has rendered certain facilities unnecessary.
Staffing levels have already declined through attrition to reflect the lower volume, however another 550 jobs will be terminated in the latest move. AmEx said a total of 3,500 existing positions will be impacted when considering relocation.
The plan requires the company to close its Greensboro, North Carolina facility. Work currently handled there will be transferred to other locations in the U.S.
The credit card provider also plans on transferring operations in Madrid, Spain to facilities in Brighton, U.K., and Buenos Aires, Argentina. Service support for the Japanese card business, meanwhile, will be moved to Japan from Sydney, Australia.
The consolidations are slated to be completed by the end of this year, and AmEx anticipates annual savings of roughly $70 million starting in 2012.
Recognizing the charges, AmEx expects to report quarterly net income of $1.1 billion, or 88 cents a share, representing an increase of 48% from a year ago. Excluding the charges, the company sees earnings per share of 94 cents.
Actual results will be released on Jan. 24.