American Express to Cut 5% of Workforce in Restructuring for AI Integration
American Express will lay off 5% of its workforce, about 3,800 employees, in a $336 million restructuring plan to prepare for artificial intelligence integration, despite beating Wall Street Q3 earnings estimates.
American Express announced that it will lay off approximately 5% of its global workforce, amounting to roughly 3,800 employees out of nearly 77,000, as part of a restructuring plan designed to prepare the company for artificial intelligence integration.
Restructuring and AI Preparation
Chief Financial Officer Christophe Le Caillec explained in an interview with CNBC that the restructuring aims to make the firm leaner and more agile. American Express will record a one-time pre-tax restructuring charge of $336 million. Le Caillec emphasized that automating poorly structured processes is ineffective, noting that management layers are being reduced and responsibilities expanded prior to AI deployment.
You do not want to automate processes that are not built in an optimal way. Therefore, we are reducing management layers and expanding managers responsibilities so we can execute automation and leverage artificial intelligence advantages in the coming quarters and years.
Financial Performance and Market Trends
The announcement accompanied strong Q3 financial results that surpassed Wall Street earnings expectations. American Express reported adjusted earnings per share of $4.68, beating the $4.48 analyst consensus. Revenues rose 9% to $20.06 billion, slightly below the $20.12 billion forecast.
Chief Executive Officer Stephen Squeri highlighted that the restructuring is meant to accelerate innovation. The company also raised its full-year earnings guidance to a range of $18.30 to $18.60 per share. Despite the positive earnings report, American Express shares dropped about 3% in morning trading.
