Why American Express Is Cutting Thousands of Jobs Despite Record Profits
New York, Saturday, 24 October 2026.
Despite reporting record quarterly revenues and raising profit forecasts, American Express is cutting roughly 3,500 jobs to restructure its global operations for rapid artificial intelligence adoption.
A Historic Profit Report Amid Restructuring Pressures
American Express (NYSE: AXP) reported its third-quarter 2026 earnings on October 22, 2026, revealing a 9% revenue increase to $20.06 billion, alongside adjusted earnings per share (EPS) of $4.68, which surpassed Wall Street’s average estimate of $4.48 [2][5]. Despite these record financials, the company announced a sweeping workforce reduction of approximately 5% on October 23, 2026, equating to roughly 3,500 to 3,840 job cuts globally [1][2][5]. The restructuring charge for this initiative was quantified at $336 million, as disclosed during the earnings call [2][5][8]. This juxtaposition of profitability and layoffs underscores a strategic pivot toward operational efficiency and technological modernization, even as investors digest the immediate financial implications of the workforce reduction.
AI as the Central Driver of the Workforce Reduction
The decision to slash jobs is explicitly tied to American Express’s accelerated integration of artificial intelligence (AI) across its operations. CEO Stephen Squeri emphasized the need to become a “more agile and efficient organization” to sustain innovation and protect profit margins over the next several years [2][5][8]. Chief Financial Officer Christophe Le Caillec further clarified that the restructuring aims to reduce organizational layers and increase spans of control, thereby optimizing processes for AI adoption [2][5]. The company plans to automate internal functions, enhance customer experience personalization through AI, and implement stricter access controls via API and MCP channels to safeguard its systems [2][5][9]. This aligns with a broader industry trend, as Barclays similarly announced a 5% workforce reduction (approximately 5,000 jobs) just days earlier, attributing its cuts to AI-driven efficiency measures [1][5].
Global Workforce Impact and Geographic Disparities
American Express’s global workforce stood at approximately 76,800 employees at the end of 2025, with only 25,900 of those roles based in the United States [8]. The layoffs, affecting roughly 5% of the total workforce, will disproportionately impact international markets, particularly India, where the company expanded aggressively in 2024 by opening a nearly one-million-square-foot office in Gurugram, employing over 18,000 people [8]. While the restructuring charge of $336 million suggests significant costs per employee, the company’s strategic investments in AI may yield long-term savings and efficiency gains, despite the short-term financial burden [2][5][8].
Market Reaction and Future Outlook
Despite the workforce reduction, American Express raised its full-year 2026 earnings guidance to a range of $18.30 to $18.60 per share, up from the previous target of $17.30 to $17.90, signaling confidence in its long-term strategy [2][5]. The company’s ability to fund part of the restructuring through the sale of its stake in Global Business Travel Group demonstrates financial resilience [2][5]. However, the market’s reaction to the layoffs remains a point of scrutiny, particularly as AI-driven job cuts become more prevalent across the financial sector. Industry analysts will closely monitor whether the efficiency gains from AI integration outweigh the reputational and operational risks associated with such sweeping workforce reductions [1][5][8].