As part of the consolidation, a facility in Greensboro, North Carolina will be closed; work currently handled there will be transferred to other locations in the US.
Subject to local consultations or feasibility studies, the company also plans to transfer work currently handled at a Madrid service centre to regional facilities in Brighton, UK and Buenos Aires, Argentina; and service support for the Japanese card business from Sydney to Japan.
The overall reengineering initiatives are expected to generate additional charges in 2011 of $60m to $80m.
Those charges would reflect costs associated with future closings of the real estate facilities and additional employee compensation during the transition period.
The consolidations, along with the reengineering initiatives reflected in the charges, are expected to deliver annualized savings of approximately $70m, starting in 2012, according to the company.
Overall staffing levels are expected to decline by about 550 positions, net. However, because the reengineering initiatives involve relocating work to different locations, approximately 3,500 existing positions would be impacted, said American Express.
The consolidations are not expected to be substantially completed until year end 2011 in order to help affected employees make the transition and to ensure the continuation of uninterrupted customer service.
After recognizing the fourth quarter charges, American Express expects to report quarterly net income of $1.1bn, or $.88 per common share. This would represent an increase of 48% from $716m, or $0.60 per share, a year ago.
