Visa Announces Major Layoffs, Citing AI and Stellar Earnings
The payments giant plans to eliminate nearly 2,600 jobs, primarily in tech and product divisions, coinciding with a strong quarterly financial report.
Visa is set to eliminate approximately 7% of its global workforce, a move that will impact nearly 2,600 employees. The company cited the ongoing artificial intelligence revolution and the need to evolve its operational strategies as the primary drivers for this significant restructuring. The cuts are expected to be concentrated within Visa's technology and product divisions.
This announcement of widespread layoffs came just hours before Visa reported strong third-quarter financial results. The company posted a net income of $11.6 billion for the prior three months, marking a 14% increase year-over-year. Adjusted earnings per share also saw an 11% year-over-year gain, reaching $3.32. Visa CEO Ryan McInerney stated that consumer and business spending has remained resilient, contributing to the company's sustained strong performance.
In a memo to staff, McInerney explained the necessity of the changes, noting, "To capture the opportunities ahead and best position Visa to lead this transformation, we must continue evolving how we work." He further emphasized the role of AI in this evolution, stating, "AI is also helping to accelerate this evolution and shape the way work gets done at Visa."
Visa's quarterly payments volume increased by 10% year-over-year, with international transactions showing a notable surge of 13%. The company's stock performance has also been robust, with shares up 25% since the end of March. Unnamed insiders, however, suggested to CNBC that the layoffs could also be part of a strategic pivot towards new revenue streams, including cryptocurrency stablecoins, cross-border business payments, and global expansion.
Visa's decision to downsize its workforce in the name of AI follows a trend seen across numerous major American corporations. Companies such as Google, Meta, Microsoft, Oracle, and Amazon have also announced significant job cuts in recent months, often attributing these reductions to technological advancements and the integration of AI. Meta, for example, laid off 10% of its workforce in May, while Microsoft offered voluntary buyouts to 7% of its U.S. employees in April.