By SIOW LI SEN

AMERICAN Express will retrench a small number of people from its Singapore office as part of the group's global retrenchment exercise which will see 4,000 jobs lost or 6 per cent of its total workforce.

A source said the number of people laid off in Singapore will be in double digits but not as high as the group number of 6 per cent.

The retrenchment package - for those who have worked at least one year - is believed to consist of three months' salary plus one month for every year of service capped at 25 years. This is above the market rate, a source said.

'Approximately 4,000 jobs are being eliminated which translates into about 6 per cent of the company's current worldwide workforce,' said Loh Wei Ling, Amex spokeswoman.

Ms Loh declined to provide specific numbers for the Singapore office.

'While I cannot give you a specific number for our geographic location or business unit, I can tell you that we are not the main focus of the restructuring. The reductions will occur throughout the company and across business units, markets and staff groups,' she said.

This is the second round of cuts for the credit card and business travel company as it grapples with rising credit card defaults.

Last November Amex cut 7,000 jobs or 10 per cent of its global workforce as part of a plan to save US$1.8 billion. It was reported then that nearly 1,000 staff are employed here. The company has three main businesses - consumer cards, corporate cards and business travel.

Singapore is also the regional office for a few of its business lines including travellers cheques.

Since last October, salaries and hiring have been frozen and when people left, their positions have not been filled.

The latest retrenchments are part of a global initiative expected to produce cost benefits of about US$800 million during the remainder of 2009.

This is in addition to the earlier plan to save US$1.8 billion.

Amex reported first-quarter income last month of US$443 million, down 58 per cent from US$1 billion a year ago on lower card spending.

This article was first published in The Business Times.