American Express to Cut 5% of Workforce Amid AI Integration

American Express is implementing layoffs affecting approximately 5% of its global workforce, a move the company states is part of a strategic effort to streamline operations and prepare for the integration of artificial intelligence. The credit card giant announced a $336 million restructuring charge associated with these workforce reductions, which will impact several thousand of its roughly 77,000 employees.

During a call following the company's third-quarter earnings report, Chief Financial Officer Christophe Le Caillec explained that the reorganization is intended to make American Express "leaner, more agile, and also [able] to prepare for AI." He emphasized the need to optimize processes before automation, stating, "You don’t want to automate processes that are not optimally structured. So what we’re doing here is to reduce layers and increase spans of controls, so that we can automate and take advantage of AI in the coming quarters and the coming years."

The announcement comes as other financial institutions also signal workforce adjustments tied to AI initiatives. British lender Barclays recently announced plans for 5,000 job cuts as part of its own AI strategy. Data from Challenger, Gray & Christmas indicates that AI has been cited in over 120,000 job cut announcements globally through September of this year, with the financial sector and other white-collar professions being notably affected.

Despite economic headwinds such as record-low consumer sentiment and persistent inflation, American Express reported an increase in profits, driven by continued spending from affluent consumers. However, CEO Stephen Squeri reiterated the necessity of the AI-driven restructuring to bolster efficiency and future competitiveness. "We’ve got good momentum, but to accelerate innovation and win over the next few years, we needed to become [a] more agile and efficient organization," Squeri said.

Squeri also addressed concerns about AI safety, assuring that the company would implement strict controls on AI access to its systems. "We need to protect our customers [and] merchants, and we’re only going to allow agents to access our systems that are either approved through API or MCP channels," he stated, referencing specific security protocols.

American Express reported adjusted earnings per share of $4.68 for the quarter, surpassing expectations of $4.48. Revenue increased by 9% to $20.06 billion, slightly below the estimated $20.12 billion. The company also raised its full-year earnings forecast to a range of $18.30 to $18.60 per share, an upward revision from its previous projection. The sale of its stake in Global Business Travel Group contributed to this improved outlook, according to Le Caillec.