American Express said it would cut almost 10 per cent of its workforce, in the latest cost-cutting measure at financial services companies forced to scale back as the US economy slows.

The 7,000 job cuts at American Express are part of a restructuring effort the credit card company hopes will generate $1.8bn of savings next year. The company said on Thursday it would also suspend management salary increases, put a freeze on new hires, slash investment spending and cut expenses for consulting, travel and entertainment.

American Express earlier this month reported a 24 per cent drop in third-quarter profits as cardholders cut spending.

Turbulence in global credit and equity markets has restricted the availability of funding for consumer and small business lenders such as American Express, while rising unemployment has contributed to higher late payments and defaults on loans.

Credit card issuers, car lenders and regional banks are slashing jobs to try to weather the downturn, adding to thousands of Wall Street job losses and cuts in the housing finance industry.

First American, the largest US title insurer, said Thursday it cut about 8 per cent of its workforce in the third quarter as lower demand for homes ate into revenue.

Further job cuts are likely following JPMorgan’s acquisition of Washington Mutual, which has more than 43,000 employees, and at Wachovia, which had plans to cut about 5,000 mortgage jobs before being sold to Wells Fargo. Bank of America said it would eliminate 7,500 jobs after buying Countrywide and thousands more job cuts are likely as the bank integrates its acquisition of Merrill Lynch.