AmEx shifts hundreds of salespeople to collections work

American Express Co. is shifting “hundreds and hundreds” of employees in its sales units to handle collections and other credit work, and plans to set aside more for loan losses this quarter.

As the coronavirus pandemic sent unemployment rates soaring, the credit-card company quickly began moving sales workers to credit and collections, Chief executive Steve Squeri told investors at a virtual conference Thursday.

The additional loan-loss reserves will probably be about as large as the US$1.7 billion posted in the first quarter, he said.

“When you think about it, credit and collections is a little bit like selling,” Squeri said. “It’s not about collecting the money. It’s understanding what somebody’s issue is and offering them solutions.”

AmEx has been battered by the global pandemic. Spending on the firm’s cards is down by a percentage in the mid-30s from a year ago, an improvement from the 45 per cent decline experienced last month.

“I never thought I would say down mid-30s is bouncing back,” Squeri said, adding that spending on travel and entertainment is still about 90 per cent lower. “As I try and describe this crisis to people, it’s 9/11, the financial crisis added together and multiply that times five. And then you can throw Hurricane Sandy in.”

Shares of the company slid 3.1 per cent to US$98.06 Thursday in New York, the worst performance in the Dow Jones Industrial Average. The stock has declined 21 per cent this year, versus a 10 per cent drop for the 30-company index.