AmEx cuts 5% of jobs and raises profit forecast slightly
American Express trims workforce and adjusts earnings outlook
American Express has announced it will lay off approximately 5% of its employees as part of a $336 million restructuring effort. The company also raised its full-year 2026 adjusted profit forecast by a midpoint of 0.85%, which is slightly less than 1%.
This move came despite recent regulatory scrutiny, including a $350 million penalty related to anti-money laundering compliance. Investors reacted negatively to the news, causing the stock to drop 3.7% by noon on October 23, 2026.
Key financial details from the report
- The restructuring charge is estimated at $336 million.
- The adjusted profit forecast floor increased from $17.30 to $17.60 per share.
- The profit forecast midpoint rose by 15 cents to $17.75 per share.
- Analysts previously expected $17.63, meaning the new forecast exceeds consensus by only 12 cents.
Reasons cited for the layoffs
Chief Executive Officer Stephen Squeri stated on an earnings call that the company is preparing to utilize artificial intelligence (a technology that uses data to perform complex tasks typically requiring human intelligence) to become more agile. Chief Financial Officer Christophe Le Caillec explained that the cuts aim to reduce management layers and allow the company to automate processes.
The company noted that it booked a nearly $1 billion pre-tax gain from selling its stake in Global Business Travel. This windfall will help fund the separation agreements for the employees being let go.
Regulatory context and stock performance
On October 8, 2026, the US Office of the Comptroller of the Currency issued a $350 million penalty to American Express for missing suspected money laundering activity. The regulator found that the bank had inadequate resources and staff lacking sufficient expertise in its anti-money laundering program.
Nothing in the company's disclosures indicates whether layoffs will affect its compliance departments. Squeri claimed that the regulatory fine does not impact the full-year 2026 guidance.
Year-to-date, the American Express stock has lost 15% of its value. The 3.7% drop on October 23 contributed to this downward trend.
Official source references
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