AmEx raises profit forecast, plans 3,500 job cuts

American Express lifts its 2026 earnings outlook after stronger-than-expected quarterly results, while restructuring plans target 5% of its global workforce.

American Express has raised its full-year 2026 profit forecast above Wall Street expectations and announced plans to cut around 3,500 jobs worldwide, highlighting how financial institutions are balancing strong customer spending with rising operating costs and pressure to improve efficiency.

The US credit card company said on Friday that it expects adjusted earnings of $17.60 to $17.90 per share for 2026. The midpoint of that range exceeds the $17.63 average analyst estimate compiled by LSEG. The planned workforce reduction represents approximately 5% of its global employees.

Chief executive Stephen Squeri said the company needed to become more agile and efficient. The announcement comes amid a wider wave of job reductions across the financial sector, where some firms have cited restructuring, automation and investments in artificial intelligence as reasons for reducing headcount. American Express’s announcement, however, does not establish that AI alone is responsible for the planned cuts.

The restructuring follows a strong third quarter. American Express reported adjusted earnings of $4.68 per share for the three months ended 30 September, beating analysts’ expectations of approximately $4.48. Revenue increased 9% year on year to $20.1 billion, while spending on cards rose 8% to $454 billion.

Spending on travel and entertainment increased 10% from a year earlier. Airline spending rose 13%, while restaurant spending climbed 9%. Chief financial officer Christophe Le Caillec noted that higher average ticket sizes and airline prices contributed to the increase in airline spending. Higher expenditure therefore does not necessarily indicate an equivalent rise in the volume of travel.

The results underline the importance of American Express’s affluent customer base. The company focuses on consumers with relatively high credit scores and disposable incomes, a strategy that can provide resilience when lower-income households face greater financial pressure. Market participants cited by Reuters said spending among wealthier customers remained robust, contrasting with signs of strain among lower-income consumers.

However, expenses remain a concern. American Express’s consolidated expenses reached $14.5 billion in the third quarter, up 9% year on year. The company has also invested in marketing, card benefits and attracting younger customers, including Generation Z and millennials, to strengthen long-term customer relationships.

Despite the improved earnings outlook, its shares fell around 2.5% during Friday’s trading session, according to Reuters. The stock had also underperformed the S&P 500 year-to-date, reflecting investor concerns about expenses and the sustainability of growth.

The company’s next challenge will be to convert strong spending and revenue growth into sustained profitability while implementing its restructuring programme. The planned job cuts may reduce costs over time, but their financial impact will depend on implementation expenses, productivity gains and the company’s ability to maintain customer service as it reorganises.

American Express’s results also illustrate the uneven nature of consumer spending in the US economy. Strong demand from affluent cardholders can support premium financial services even as other households experience greater pressure from living costs. For investors, the balance between resilient spending, rising expenses and workforce restructuring will remain central to assessing the company’s performance.

Sources: Reuters: American Express raises 2026 profit forecast and plans 3,500 job cuts, Associated Press: American Express profits rise as company plans workforce cuts, US Securities and Exchange Commission: American Express Q3 2026 results, Payments Dive: AmEx plans workforce reductions amid AI adoption.