It was a given that American Express Co. would be downsizing, but Thursday's announcement that it would lay off 10% of its global work force and freeze hiring and salaries was a shock, leading some experts to question whether its $1.8 billion of cost cuts will threaten long-term growth.

Amex officials tried to downplay the impact by insisting that the layoffs would not include people who interact directly with customers.

If the jobs lost are "not customer-facing people, who are they?" asked Philip J. Philliou, a former Amex executive and now a partner at the New York payment consulting firm Philliou Selwanes Partners LLC. "Those are product people. Those are marketing people. Those are technology people. That's the intellectual engine of the company."

Ten percent of "any major corporation is enormous," he said, but "when you reduce that type of staff" devoted to technology and product development, "we may not feel the impact for 6 or 12 months out."

Joanna Lambert, an Amex spokeswoman, said Thursday that the 7,000 jobs would be cut "across the board." The product development, marketing, and technology departments will lose positions, but so will "the rest of the business." (She would not be more specific.)

Amex said about $1 billion of the savings will come from a reduction in investments in "technology, marketing, and business development" and from "streamlining costs associated with some rewards programs." The freeze applies to "management level salary increases for 2009," and the hiring freeze covers open positions.

Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co. Inc., expressed concern about the long-term consequences for Amex's growth and reputation. "While cost reductions are necessary in this environment, we are concerned that the company's efforts to cut spending, raise revenues, and modify its rewards programs may negatively impact its high-value proposition that customers attribute" to Amex, he wrote in a research note Thursday.

Mr. Philliou said he was most concerned about Amex's ability to attract network business from other issuers.

It has signed up companies around the world, including Citigroup Inc. and Bank of America Corp., to issue its network-branded cards through its global network services division. Third-quarter billed business at the division grew 29% from a year earlier, but it could become "a casualty in this harsh economic environment, as it is difficult to imagine that issuers are going to be excited by Amex's cutbacks on marketing and technology," Mr. Philliou said.

"There have been high expectations set for some time now" with the division, he said, and by "cutting back in areas that are appealing to issuers, that is going to become a much harder sell for Amex."

During its third-quarter earnings call last week, Kenneth I. Chenault, Amex's chairman and chief executive officer, warned investors to expect "a combination of cost reductions and revenue-building actions."

In a press release Thursday, he said it had conducted "an intensive, companywide review of priorities and staffing levels" and that the restructuring would "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."

Ms. Lambert said these investments could be directed towards areas such as "middle-market" businesses that fall between the small-business and corporate portfolios, global network services, "loyalty programs," and "other areas that have long-term growth potential."

Funding remains an issue. Like other major issuers, Amex has been dealing with higher loan losses and lower profits as a result of unemployment and weakness in consumer spending. But it has fewer funding alternatives than rivals with large retail banking operations, and this month it reassured investors about its ability to meet its obligations.

Last week Amex said it intended to address some of those concerns through its access to the government's commercial paper funding facility, and it followed through on those intentions on Wednesday, according to Ms. Lambert.

"We did tap it yesterday, and we do intend to do that again," she said. "We're always interested in broadening our sources of funding."

Capital One Financial Corp. cut about 3,900 jobs last year, but Discover Financial Services, whose model comes closest to Amex's, has not announced large-scale staff cuts.

Analysts worried that the reductions in investment spending and the decision to rein in lending could damage Amex's reputation. It said this month that it has lowered credit lines for about 10% of its cardholders, more than twice as many as in a typical year, and it said during its third-quarter earnings call that it will raise interest rates on some consumer accounts by 2 to 3 percentage points.

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