American Express Announces 5% Workforce Cuts Amidst Q3 Earnings Report

American Express (Amex) has announced a significant restructuring plan that includes laying off approximately 5% of its global workforce, which amounts to about 3,850 employees. This decision comes alongside the company's Q3 earnings report, which, while exceeding profit estimates, raised concerns among investors regarding the underlying growth of the business.

Despite reporting a 13% increase in earnings per share, the company's underlying pretax profit saw only a modest rise of 1.6%. Much of the earnings growth was attributed to a lower tax bill and share buybacks rather than strong operational performance. Additionally, Amex's revenue fell short of Wall Street expectations, leading to a 3.62% drop in its stock price following the announcement.

Chief Financial Officer Christophe Le Caillec explained that the workforce reduction is aimed at making Amex leaner and more agile, particularly in preparation for increased automation through artificial intelligence. The restructuring will incur a charge of $336 million, which the company plans to offset with a one-time gain from the sale of its stake in Global Business Travel.

Furthermore, Amex has faced regulatory challenges, including a $350 million penalty related to deficiencies in its anti-money laundering program. This penalty has raised questions about the adequacy of resources within the company, particularly in compliance departments, although CEO Stephen Squeri stated that it would not impact the company's full-year guidance for 2026.