American Express to Lay Off 5% of Workforce Amid AI Transition

American Express has announced plans to reduce its global workforce by 5%, which translates to thousands of job losses, as part of its strategy to integrate artificial intelligence into its internal processes. CEO Stephen Squeri revealed this decision during the company's third-quarter earnings call, where he also noted that the firm would incur a restructuring charge of $336 million. At the end of 2025, American Express employed nearly 77,000 individuals.

The restructuring initiative aims to streamline operations, making the company 'leaner and more agile' in anticipation of AI advancements. Chief Financial Officer Christophe Le Caillec emphasized the importance of optimizing existing processes before automation, stating, "You don't want to automate processes that are not optimally structured." This approach is intended to reduce organizational layers and expand control spans, facilitating the effective use of AI in the near future.

This announcement reflects a growing trend within the financial services industry, where companies are increasingly replacing repetitive roles with AI technologies. Just days prior, Barclays also confirmed plans to cut 5,000 jobs, marking a similar shift towards tech-driven cost management. Despite these layoffs, the financial sector continues to report strong profits driven by increased consumer spending and stable credit conditions.

During the earnings call, Squeri highlighted the necessity of enhancing the company's efficiency to maintain competitive momentum. He stated that to foster innovation and achieve success in the coming years, American Express must evolve into a more agile organization. Squeri dedicated a significant portion of his remarks to discussing AI's role in personalizing customer experiences, stressing the need for secure integration of AI systems while ensuring customer protection.

In terms of financial performance, American Express exceeded Wall Street's profit expectations, reporting adjusted earnings per share of $4.68, surpassing the analyst average estimate of $4.48. The company has also raised its full-year earnings guidance to between $18.30 and $18.60 per share, up from the previous range of $17.30 to $17.90. However, total revenue of $20.06 billion fell slightly short of the expected $20.12 billion, with executives attributing some revenue challenges to recent exits from small business partnerships. Following the announcement, shares of American Express experienced a decline of approximately 4% in afternoon trading.