PM's plea has no credit; Amex cuts jobs

Credit card company American Express has asked some of its senior managerial employees to quit as part of its strategy to save costs.

The layoffs are primarily in Delhi and Bangalore and all the employees who have been asked to quit have been with Amex India for the past 15 to 20 years. Amex India has hired a consultancy to help sacked employees find a new job. The company currently has around 6,000 employees in India.

PTI reports the company is believed to have handed over pink slips to about 200 employees and senior executives.

The report on layoffs comes on a day when Prime Minister Manmohan Singh asked Indian companies to "refrain from large-scale lay-offs". Singh on Monday warned industry leaders that layoffs may lead to a “negative spiral”.

"While every effort needs to be made to cut cost and raise productivity, I hope there will be no knee-jerk reaction such as large-scale layoffs, which may lead to a negative spiral," Singh said on Monday.

American Express confirmed that it would cut jobs in India but said it cannot give a specific number. “Approximately 7,000 jobs are being eliminated company-wide which translates into about 10 percent of the company's worldwide workforce,” the company said in a press statement.

"While we cannot give you specific numbers for India, we can tell you that we (Indian operation) are not the main focus for restructuring," it said. "Reduction will occur throughout the company and across business units, markets and staff groups, primarily focusing on management and other positions that do not interact directly with customers."

American Express, last week, announced it would lay off 7,000 employees—about 10 per cent of its worldwide workforce—to save $1.8 billion in costs in 2009.

PTI reports the company would also suspend management-level salary hikes for the next year and curtail hiring.

Jet Airways was last month was forced to withdrew its decision to sack 1,900 employees.