American Express Co. is reorganizing management and consolidating its marketing activities as the biggest credit-card issuer by purchases seeks to cut $1 billion in costs over the next two years.
"To get ahead of the changes that are altering the dynamics of the payments business, we need to readjust our expense base," Chief Executive Officer Ken Chenault said Wednesday in a statement. "This is a big task. It essentially means that we must transform the way the company works."
Amex is creating a global marketing operations unit led by Mike McCormack, who will report to Tammy Weinbaum, executive vice president of global business services, according to the statement. Chief Marketing Officer John Hayes is leaving after 21 years at the firm, while Elizabeth Rutledge was named head of global advertising and media. The company is creating an enterprise digital group to centralize Web, mobile and digital products under Luke Gebb.
Chenault, 64, is grappling with the loss of Amex's biggest partner, Costco Wholesale Corp., and trying to end the lender's steepest stock slump since the financial crisis. Quarterly results will be uneven and expenses are expected to rise as the company spends money to attract new customers, Amex has said.
Global banking president Paul Fabara is taking on the role of chief risk officer and head of a new global risk and compliance group. Ash Gupta, Amex's chief risk officer for the past nine years, becomes president of credit risk and global information management.
The company also said it's merging its world service and global credit administration units into a single business overseen by Raymond Joabar.
Chenault reiterated that organizational changes will result in a number of job cuts across the firm. "At this time, we do not know what the magnitude of those reductions will be, as decisions on specific positions affected are yet to be made," he said.
Amex shares rose 0.9 percent to $53.67 at 12:42 p.m. in New York. The stock has fallen 23 percent this year, the worst performance in the Dow Jones Industrial Average.
