Tom Reese/Paul Rubillo, Dividend.com
American Express Company (AXP) just announced that it plans to cut 7,000 jobs, or about 10 percent of its worldwide work force, in an effort to slash costs by $1.8 billion in 2009.
The company is also suspending management-level salary increases next year and instituting a hiring freeze. On top of that, the company plans to scale back investments in technology, marketing, and business development, and streamline costs associated with some rewards programs.
The Bottom Line
We continue to avoid shares of AXP, as we have since our early June coverage began, when shares were trading at $44.65. The company has a dividend yield of 2.86%, based on lat night's closing stock price of $25.21. Clearly, The market-wide layoff announcements are picking up steam, just as we had discussed in some previous articles. We certainly would avoid AXP stock for now, until we see the company's results stabilize.
American Express Company (AXP) is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
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