American Express disclosed it will eliminate roughly 3,500 positions, about 4.5% of its global workforce of 78,000 employees, as part of a restructuring effort announced with its third-quarter earnings.
Restructuring rationale
Chief Executive Stephen Squeri said the reduction aims to streamline operations, boost productivity and speed decision-making. He added that the company must become more agile to stay competitive in the evolving payments market.
“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,” he told analysts on the earnings call. Executives noted that managers were asked earlier in the year to identify ways to improve operations, though no further specifics on the cuts were provided.
Competitive environment and AI focus
Traditional rivals such as JPMorgan Chase, Visa and Mastercard continue to challenge American Express in the premium consumer card segment with enhanced loyalty programs and lounge access. On the corporate side, newer firms including Brex and Ramp are intensifying pressure, leveraging artificial-intelligence agents for expense management.
Brex was acquired this year by Capital One, which also bought card competitor Discover last year, further consolidating competition. “Those are two of the big competitors that are out there,” Squeri said, adding that they have unlocked automation in the expense-management segment.
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He indicated that it will introduce more AI agents into its platform, with plans to use tools like ChatGPT to personalize restaurant and travel service pitches. In addition, the firm expects AI to help tailor reservations through its partner Resy, matching premium members’ tastes more closely.
Financial performance and restructuring costs
Revenue grew 9% to $20 billion for the quarter, and net income rose 28% to $3.71 billion. Card-related billing increased 8% to $454 billion on a foreign-exchange adjusted basis, though growth slowed from the earlier pace.
Chief Financial Officer Christophe Le Caillec described demand as “strong and consistent.” The restructuring incurred a charge of $336 million, alongside a gain from the sale of the travel services business. Separately, the firm recorded a $350 million penalty to settle an enforcement action by the Office of the Comptroller of the Currency over anti-money-laundering compliance failures.
Total expenses rose to $14.5 billion, driven in part by an 11% increase in marketing spend. To broaden its customer base, the company is partnering with lower-income lenders such as Bread Financial and Synchrony, avoiding similar alliances with large banks that have underperformed in the past.
