Stephen Squeri, chairman and executive director of American Express Co., spoke during the Economic Club of New York event in New York, USA, Thursday, November 10, 2022.
Stephanie Keith Bloomberg Getty Images
American Express cutting thousands of employees as the leading credit card company prepares for Artificial Intelligence to take over more of its internal processes.
Amex is cutting 5% of its global workforce and taking $336 million in restructuring charges, CEO Stephen Squeri told analysts on Friday on the company’s third-quarter earnings call. The company has nearly 77,000 employees by the end of 2025.
Chief Financial Officer Christophe Le Caillec told CNBC in an interview that the restructuring is to make American Express “leaner, more agile, and also to prepare for AI.”
“You don’t want to automate a process that isn’t optimally structured,” says Le Caillec. “So what we’re doing here is reducing the layers and increasing the span of control, so we can automate and take advantage of AI in the coming quarters and the coming years.”
Amex’s announcement reflects a broader trend in financial services, where banks are working to replace repetitive roles with AI automation. On Thursday, Barclays confirmed plans to cut 5,000 jobs – as well as about 5% of its staff – in another technology-driven cost initiative. The move comes despite the sector enjoying strong gains from consumer spending and resilient credit.
During an analyst call, Squeri said the cost was to improve the company’s efficiency.
“We have great momentum, but to accelerate innovation and win over the next few years, we need to be.” [a] a more agile and efficient organization,” said Squeri.
‘go rogue’
Squeri devoted a 10-minute segment of his prepared remarks to his views on AI, focusing primarily on how it is being used to create experiences and offers for Amex cardholders.
While the CEO emphasized the need to meet customers’ desire to use AI, including agents, he added that Amex “will not allow assistants to run rogue through our system.”
“We have to protect our customers [and] merchants, and we will only allow agents to access our system that are approved through the API or MCP channel,” he said, citing two ways to securely connect external platforms with the Amex system.
Amex posted quarterly results that topped Wall Street’s profit expectations. Adjusted earnings per share were $4.68, beating analysts’ average estimate of $4.48, according to LSEG.
The company raised its full-year earnings guidance to a range of $18.30 to $18.60 per share, on an unadjusted basis, up from its previous target of $17.30 to $17.90.
The metrics were helped by the proceeds from the sale of Amex’s stake in the Global Business Travel Group, which was included in the restructuring plan, Le Caillec said.
Total revenue rose 9% to $20.06 billion, slightly below LSEG’s $20.12 billion Wall Street forecast. Executives attributed part of the spending drag to exiting small business co-brand partnerships.
Shares of the card company were down about 4% in afternoon trade.