Feb 19, 2016 07:34 AM EST

American Express Reorganizes Top Management In $1 Billion Cost-Saving Move

American Express, one of the largest credit card issuers in the world, has recently unveiled its plan to reduce jobs, reorganize its management and slash $1 billion in costs for the next two years.

As the announcement was made on Wednesday, shares of AmEx jumped 43 cents, or 0.8 percent. Company shares experienced loss of around one third of their value last year.

"To get ahead of the changes that are altering the dynamics of the payments business, we need to readjust our expense base," said Ken Chenault, Chief Executive Officer in a statement Wednesday. "This is a big task. It essentially means that we must transform the way the company works," he added.

The restructuring of American Express was done in the midst of a tough time for the credit card issuer since it is not only competing with MasterCard and Visa, but is also challenged by a fast-growing and innovative payment companies such as Square and PayPal. As it is, the company has an adjusted profit per-share that dropped 11.5 percent during the fourth quarter to $1.23 per share.

The card company is currently developing its global marketing operations headed by Mike McCormack. He reports to Tammy Weinbaum, the company's executive vice president for global services.

Leaving his post as chief marketing officer is John Hayes who held this position for 21 years. Also appointed as head of the company's global advertising and media, is Elizabeth Rutledge. To centralize its web, digital and mobile products, AmEx is creating an enterprise digital group.

These changes announced in a memo from Chenault are designed to solve the current problems by "reengineering key cross-business processes," "leveraging policy changes," and "streamlining our organization."

Chenault, 64, is dealing with the departure of Costco Wholesale Corp., the largest partner of American Express and is attempting to stop the sharpest plunge of its stock since the financial crisis.

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