American Express announces job cuts despite strong quarterly results

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American Express announces job cuts

Highlights

American Express raises its 2026 adjusted earnings forecast.
Affluent cardholders drive higher travel spending.
Company plans to cut 5% of its global workforce.

The company expects adjusted earnings of $17.60 to $17.90 per share for 2026, compared with the Wall Street consensus of $17.63, Reuters reports. American Express reported third-quarter adjusted earnings of $4.68 per share, exceeding analysts' expectations of approximately $4.48, although its shares fell 1.3% in volatile premarket trading.

Affluent customers sustain spending growth

American Express reported third-quarter revenue of $20.1 billion, up 9% from a year earlier. Total spending on company-issued cards, known as billed business, increased 8% to $454 billion, reflecting continued demand from customers with higher incomes and stronger credit profiles.

Travel and entertainment spending rose 10%, with airline purchases increasing 13% and restaurant spending advancing 9%. Higher airfares contributed to the airline category's growth as carriers passed rising fuel costs on to passengers. The increases suggest that affluent consumers remain willing to spend on discretionary services despite broader economic uncertainty.

Workforce reductions accompany stronger outlook

The planned elimination of 5% of the global workforce introduces a cost-cutting element to American Express's growth strategy. The announcement did not specify how many positions would be affected, or which departments would face reductions or when the restructuring would be completed.

The company has also invested in attracting younger customers, particularly millennials and Generation Z, to support longer-term spending growth. That strategy depends on building lasting cardholder relationships while maintaining profitability, making the planned workforce reductions a notable development alongside continued investment in customer acquisition.

Strong earnings face a cautious market response

Despite exceeding quarterly expectations, American Express shares declined in premarket trading. The reaction reflected a pattern of investors selling the stock after earnings announcements, even when results surpassed forecasts, suggesting that expectations for the company's performance remain demanding.

The revised outlook highlights the resilience of spending among higher-income consumers, but it also raises questions about the balance between expansion and cost control. Rising travel prices have supported transaction values, while the restructuring may help manage expenses. Investors will be watching whether spending growth remains strong enough to sustain earnings momentum as the company reduces staffing and navigates an uncertain economic environment.

We have previously highlighted that American Express ratings upgraded by Fitch as earnings and capital strength support outlook.

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