American Express to cut about 5% of staff as it raises profit outlook

what happened

American Express plans to eliminate roughly 5% of its workforce worldwide, a shake-up the company says is meant to flatten management and quicken decision-making, Dow Jones Newswires reports. The cuts affect about 3,500 positions, announced alongside third-quarter results that showed higher profit and revenue.

Third-quarter profit reached $3.71 billion, or $5.42 a share, up from $2.9 billion ($4.14 per share) in the prior-year quarter. Adjusted per-share earnings came in at $4.68 against analysts' forecast of $4.48, while revenue net of interest expense climbed 9% to $20.06 billion, slightly below the $20.12 billion expected.

The company lifted its full-year EPS guidance to $18.30–$18.60 from $17.30–$17.90. Part of the increase reflects a sale of its equity stake in Global Business Travel Group, and some of those proceeds go toward the restructuring. Shares fell 3.3% to $314.57 on Friday and are down 15% this year.

why it matters

For markets, the key points are lower operating costs from the job cuts and steady card spending that supports revenue. Shares are already well down this year, so investors will watch how quickly the restructuring produces efficiency gains and whether card-member growth holds up.

market impact

AXP and US card issuers: higher customer spending and leaner costs support the earnings outlook

tags

instruments