Amex to slash 5% of headcount as CEO seeks to reduce expenses

American Express is cutting 5% of its headcount globally as chief executive officer Steve Squeri seeks to keep a lid on the company’s rising costs.

Squeri told Bloomberg TV that the company has 78,000 employees, meaning the move will affect about 3,500 jobs.

Financial firms have been cutting jobs in recent months, with some attributing the changes to the increased use of artificial intelligence. This week, Barclays said it would eliminate 5,000 jobs. HSBC Holdings is planning job reductions across its British wealth-management business, Bloomberg News reported earlier in October, and Citigroup has also been lowering its headcount.

Squeri said on a call with analysts on Oct 23 that the job cuts reflect the desire to make the company more agile and efficient, and find ways to reduce layers and speed up decision-making.

The workforce cuts were announced after Amex posted third-quarter earnings that beat estimates, with adjusted earnings per share of US$4.68 surpassing the US$4.49 average analyst estimate in a Bloomberg survey.

The company also raised its full-year earnings guidance, saying it expects earnings per share of US$18.30 to US$18.60 in 2026, according to a statement on Oct 23. Previously, the figure was expected to be US$17.30 to US$17.90.

But billed business – a measure of transactions on credit cards and other products – came in at US$454 billion (S$580 billion) in the third quarter, shy of the US$456.9 billion average estimate in a Bloomberg survey. The company said it had exited some small-business co-brand deals, which affected results.

That slower growth in billed business is likely a slight disappointment, according to Truist Securities analysts including Brian Foran.

“The headline is good – Amex beats on earnings and raises full-year guidance,” the analysts said in a note to clients. “The details are more mixed.”

The company’s results were also affected by the sale of Amex’s equity interest in Global Business Travel Group, which resulted in a US$751 million after-tax gain. Amex used a portion of the gain to fund a US$253 million after-tax restructuring charge tied to efficiency initiatives. The gain, net of the restructuring, is excluded from the adjusted results.

“Our business momentum continues, with strength in billings, new acquisitions and card member retention, and excellent credit quality,” Squeri said in the statement.

The New York-based firm said expenses climbed about 9% to US$14.5 billion in the third quarter, less than the US$14.8 billion estimate from analysts.