AmEx Raised Its Profit Forecast and Announced Layoffs on the Same Day
American Express beat earnings expectations and lifted its profit forecast, then disclosed plans to eliminate thousands of jobs on the same call. What spooked investors had less to do with the cuts themselves and more to do with what the…
On October 23, 2026, American Express (NYSE:AXP | AXP Price Prediction) raised its full-year profit forecast. On the earnings call that same morning, it said it would cut about 5% of its global workforce.
Full-year 2026 GAAP earnings per share guidance rose to $18.30 to $18.60, from a prior range of $17.30 to $17.90. The cuts come to roughly 3,500 jobs out of about 78,000 workers worldwide.
Investors weighted the cuts and slower spending growth more than the higher forecast. Shares fell 3.68%, or $11.95, to $313.22. That leaves the stock down 14.39% for the year, with a market cap of $211.52 billion.
What AmEx Put in Writing and What It Held Back
The signed and disclosed part is a $336 million pretax restructuring charge, or $0.37 per share. AmEx did not say which units or countries will lose jobs, or when the cuts will be finished. It also did not say how much the cuts will save or whether those savings are already in its plans for next year. At year-end 2025, about 50,900 of its employees worked outside the U.S. and about 25,900 worked inside it.
A nonrecurring item drives much of the GAAP raise: a $982 million pretax gain on selling AmEx’s stake in Global Business Travel Group (NYSE:GBTG), worth $1.11 a share. The adjusted range of $17.60 to $17.90 moved only at the low end.
Chief executive Stephen Squeri said, “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.” Chief financial officer Christophe Le Caillec said the goal is to make the company “leaner, more agile, and also to prepare for AI” by removing layers of management before more work is automated.
How Much the Cuts Matter to Earnings
Third-quarter revenue net of interest expense was a record $20.06 billion, up 9%. Adjusted EPS rose 13% to $4.68. Analysts surveyed by LSEG expected $4.48 and $20.12 billion, so AmEx beat earnings expectations but missed revenue expectations.
Billed business, the total spent on AmEx cards, rose 8% to $454.0 billion, down from a 9% rate in the first half, while marketing expense grew 11%. Provisions for credit losses fell to $1.0 billion from $1.3 billion because AmEx released some of its loan-loss reserves, a boost it cannot count on every quarter.
Why the Market Sold an Earnings Beat
Barclays (NYSE:BCS) announced about 5,000 job cuts on October 22 and pointed to productivity gains from AI. Large lenders are increasingly cutting staff ahead of automation, so AmEx’s cuts fit a wider pattern.
Visa (NYSE:V) slipped 1.55%, and Mastercard (NYSE:MA) slipped 1.52%. Both are still up for the year, Visa by 17% and Mastercard by 9.93%. They earn fees on spending without lending funds, while AmEx both issues the cards and runs the network, so if spending slows, it loses fee income and faces higher credit losses at the same time.
What the Results Mean for AXP Shares Into Year-End
Credit remains healthy, with the net write-off rate declining to 1.8% from 1.9%. Squeri said AmEx is “on track to deliver another year of 10 percent revenue growth.”
The shares trade well below the $372.47 average price target in the TipRanks analyst consensus before the report. The $3.80 annual dividend, a 1.21% yield, provides some income while the job cuts take effect.
Check billed business growth in the fourth-quarter report. If it falls below 8%, or the shares close under the 52-week low of $290.97, the outlook for the shares would weaken.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
