Amex cut 5% headcount as costs rise at card company
American Express plans to cut 5% of its global workforce, affecting about 3,500 jobs, as CEO Steve Squeri seeks to control rising costs. The announcement…
American Express plans to reduce its global workforce as expenses climb. The company is making an amex cut 5% headcount, affecting about 3,500 jobs, Chief Executive Officer Steve Squeri told Bloomberg TV.
The cuts are intended to make the company more agile and efficient, reduce management layers and speed up decision-making, Squeri said on a call with analysts. The announcement followed third-quarter results that beat earnings estimates, though a measure of spending on its cards came in below analysts’ expectations.
The scale is significant. Squeri said American Express has 78,000 employees, putting the planned reduction at about 3,500 jobs. The company did not provide further details in the report about which teams or locations would be affected.
Amex cut 5% headcount as expenses climb
Costs are pressing on the business. American Express said expenses rose about 9% to $14.5 billion in the third quarter, below the $14.8 billion estimate from analysts. Spending on member rewards increased 10%, while marketing expenses rose 11%.
The company has been investing in benefits to retain premium card members. It refreshed certain cards and added new perks to its Platinum card last year. Earlier this month, it said certain luxury rentals booked through Airbnb would count toward cardholders’ annual lodging credit.
That competition remains intense. “It's been highly competitive,” Squeri said of the contest for premium cardholders. “And our assumption is that it will remain highly competitive.”
The cost-control push comes as American Express balances customer perks with its effort to sustain growth. For cardholders, the pressure on expenses matters because rewards and other benefits are part of the company’s competition for premium customers; the report does not say whether the workforce cuts will change any existing card benefits.
Earnings beat, but card spending missed estimates
Adjusted earnings per share reached $4.68, above the $4.49 average estimate in a Bloomberg survey. American Express also lifted its full-year earnings guidance, saying it expects earnings per share of $18.30 to $18.60 in 2026, up from its previous forecast of $17.30 to $17.90.
Billed business, a measure of transactions on credit cards and other products, totaled $454 billion in the quarter. That was below the $456.9 billion average estimate in the survey. The company said results were affected by its exit from some small-business co-brand deals.
Analysts at Truist Securities, including Brian Foran, described the quarter as a mixed picture. “The headline is good — Amex beats on earnings and raises full year guidance,” they said in a note to clients. “The details are more mixed.”
Results also included a $751 million after-tax gain from the sale of American Express’s equity interest in Global Business Travel Group Inc. The company used part of that gain to fund a $253 million after-tax restructuring charge tied to efficiency initiatives; the gain, net of restructuring, was excluded from adjusted results.
American Express shares were down 1.8% to $319.45 at 9:35 a.m. in New York trading Friday, extending the decline this year to nearly 14%.
Source: finance.yahoo.com
