American Express to Lay Off 3,500 Employees Amid Profit Forecast Increase
Despite announcing a rise in its 2026 earnings outlook, American Express is set to reduce its workforce by 5% globally.
Amex plans to cut approximately 3,500 jobs, about 5% of its workforce.
The company raised its 2026 earnings forecast to between $18.30 and $18.60 per share.
Rising operational costs and a mixed earnings report have prompted the layoffs.
American Express has announced a significant reduction in its workforce, planning to lay off around 3,500 employees, which constitutes about 5% of its global staff. This decision comes as CEO Steve Squeri aims to manage increasing expenses and enhance operational efficiency, even as the company has raised its earnings forecast for 2026 following a stronger-than-expected performance in the third quarter.
The company, which employs approximately 78,000 people worldwide, reported adjusted earnings of $4.68 per share for the third quarter, surpassing analysts' expectations of $4.49. Despite this positive earnings report, the company's billed business, which tracks transactions made through its credit cards, fell short of projections, totaling $454 billion against an anticipated $456.9 billion. This discrepancy was partly attributed to the exit from certain small-business co-brand partnerships.
In the context of broader trends in the financial services sector, Amex's layoffs reflect a growing movement among companies to streamline operations and improve efficiency. Other firms, such as Barclays and HSBC, have also announced job cuts, with Barclays planning to eliminate 5,000 positions. The increasing adoption of artificial intelligence is cited as a contributing factor to these workforce reductions across the industry.
Amex's operational expenses rose to $14.5 billion in the third quarter, marking a 9% increase, although this was lower than the $14.8 billion that analysts had predicted. The company is under pressure to enhance its operational efficiency while continuing to grow its business. Additionally, Amex's financial results were impacted by the sale of its stake in Global Business Travel Group Inc, which generated a significant after-tax gain that was used to cover restructuring costs related to efficiency initiatives.
Looking ahead, American Express continues to focus on its premium card offerings and has recently introduced new benefits for its Platinum cardholders. The company is also facing regulatory scrutiny, with a $350 million fine related to deficiencies in its anti-money-laundering systems. Despite these challenges, Amex maintains that its business momentum remains strong, with ongoing investments in customer retention and credit quality.
