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American Express is slashing 5% of its workforce as the credit card giant prepares to automate some of its internal processes using AI – the latest tech-driven layoffs to hit the financial sector.
The company on Friday announced a $336 million restructuring charge as part of the layoffs, which will impact thousands of the firm’s roughly 77,000 workers.
Christophe Le Caillec, the firm’s chief financial officer, told CNBC after the firm reported its third-quarter earnings that the reorganization will make American Express “leaner, more agile, and also [able] to prepare for AI.”
“You don’t want to automate processes that are not optimally structured,” he added. “So what we’re doing here is to reduce layers and increase spans of controls, so that we can automate and take advantage of AI in the coming quarters and the coming years.”
Shares of American Express slid 3.8% by about 1 p.m. ET as investors took the layoffs as the latest example of AI’s potential to eliminate jobs.
British lender Barclays on Thursday announced 5,000 planned job cuts in its own AI push.
So far this year through September, AI has been cited in more than 120,000 job cut announcements, according to data from Challenger, Gray & Christmas.
The financial sector and other white-collar professions have been among those most impacted by the new tech.
Despite record-low consumer sentiment readings and stubbornly high inflation, American Express reported a rise in profits as shoppers – especially wealthier ones – have shrugged off sky-high prices and continued to spend.
But during a post-earnings call Friday, CEO Stephen Squeri said the AI push and layoffs were necessary to improve efficiency and prepare for the future.
“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 said.
He added that the company will use AI to personalize customer experiences and offers, but assured investors that American Express is “not going to let assistants run rogue through our system.”
Tech giants have reported a slew of concerning incidents in which AI agents broke out of their restraints or turned off safety systems.
Industry leaders like Anthropic CEO Dario Amodei and OpenAI’s Sam Altman have called for more regulations and a development pause after a researcher last month sounded the alarm over the potential for AI to wipe out the human race.
“We need to protect our customers [and] merchants, and we’re only going to allow agents to access our systems that are either approved through API or MCP channels,” Squeri said, referencing two external security systems.
On Friday, the credit card company reported adjusted earnings per share of $4.68 – beating expectations of $4.48.
Revenue jumped 9% to $20.06 billion, slightly missing estimates of $20.12 billion.
American Express also hiked its full-year earnings forecast to $18.30 to $18.60 a share, up from a previous range of $17.30 to $17.90.
Its sale of the company’s stake in Global Business Travel Group helped boost its earnings prediction, according to Le Caillec.