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American Express plans to eliminate about five percent of its global workforce as part of a restructuring effort, the company announced during its third-quarter earnings call on Friday. The move will impact roughly 3,500 positions out of the company's 77,000 employees worldwide.
According to the Wall Street Journal, American Express said the layoffs are designed to "reduce layers and speed up decision making" as the credit-card company prepares to integrate more artificial intelligence into its operations. The restructuring comes during a year of strong financial performance for the company, with higher third-quarter profits and revenue prompting an upward revision in its annual profit outlook.
Chief executive Stephen Squeri told analysts that the decision will help American Express become a more "agile and efficient organization." He stated, as reported by BigGo Finance, "We have got good momentum, but to accelerate innovation and win over the next few years, we needed to become a more agile and efficient organization." Squeri also said the company's strong performance has allowed it to invest more in marketing and technology, using some of the gains from the year to make the organization better prepared for the future.
The restructuring resulted in a $336 million charge for the third quarter, according to BigGo Finance.
American Express is not alone in workforce reductions among financial and technology firms, as other companies such as Barclays and eBay have also announced job cuts recently. The company’s focus remains on serving its premium customer base while adapting to changes in technology and cost structures.
Looking ahead, American Express forecasts full-year earnings per share to be between $18.30 and $18.60, surpassing previous guidance, and expects continued revenue growth into the next year, as noted by Reuters.