NEW YORK (Reuters) - American Express Co <AXP.N>, the credit card and travel services company, on Monday said it plans to eliminate 4,000 jobs, or 6 percent of its workforce, as the weakened economy causes higher customer defaults.
The cuts are part of the New York-based company's plan to save $800 million (521 million pounds) over the rest of 2009.
American Express plans to take an after-tax charge of $117 million to $163 million in the second quarter, largely associated with the job cuts. It said the cuts will occur across a variety of businesses, saving $175 million.
The company also plans to cut spending by $500 million on marketing and business development and $125 million on consulting and other services, travel and overhead.
American Express was one of 19 banking companies to undergo government "stress tests" to gauge their ability to weather a deep recession.
While it was among the nine told it did not need more capital, American Express has been hurt by rising credit card defaults, as more cardholders lose their jobs.
"We continue to be very cautious about the economic outlook," Chief Executive Kenneth Chenault said in a statement. He said the cost savings "will be reinvested in the business to make sure we can take competitive advantage of opportunities as the economy begins to rebound."
American Express shares fell 5 cents to $26.08 after-hours, after rising $1.90, or 7.8 percent, in regular trading. The company is part of the Dow Jones industrial average <.DJI>.
(Reporting by Jonathan Stempel; Editing by Gary Hill)