What happened?
Shares of global payments company American Express (NYSE: AXP) fell 3.5% in the afternoon session after the company announced plans to eliminate roughly 5% of its workforce, or about 4,000 employees, alongside its third-quarter 2026 financial results. According to CNBC, the cuts are American Express’s first major reduction in about a decade.
Chief Executive Stephen Squeri told analysts the company is taking a $336 million restructuring charge to become more agile, and Chief Financial Officer Christophe Le Caillec said the goal is to reduce layers so the company can automate work and prepare for artificial intelligence. The firm had almost 77,000 employees at the end of 2025. The quarter itself was strong. According to the company’s press release, revenue net of interest expense was a record $20.06 billion, up 9%, in line with the $20.12 billion consensus. GAAP earnings were $5.42 a share, up 31% and above the $4.50 consensus, helped by an after-tax gain on the sale of its stake in Global Business Travel. Adjusted earnings were $4.68 a share, up 13%. Billed business rose 8% to $454 billion. Squeri raised full-year earnings guidance to $18.30 to $18.60 a share, or $17.60 to $17.90 on an adjusted basis, and said the company is still on track for about 10% revenue growth. The shares fell anyway. Expenses were up 9%, and the job cuts landed on top of a stock that had already been pricing in spending from the company’s affluent cardholders.
The shares were trading at $313.36, down 3.6% from the previous close.
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What is the market telling us
American Express’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 7.8% on the news that the release of a stronger-than-anticipated Producer Price Index (PPI) report showed wholesale inflation rose more than expected in January. The U.S. Bureau of Labor Statistics reported that the PPI, a key measure of inflation at the wholesale level, increased by 0.5% last month, significantly above the 0.3% consensus forecast from economists. On a year-over-year basis, the index rose 2.9%. This unexpectedly high reading suggests that inflationary pressures in the supply chain are more persistent than previously thought. The data has dampened investor optimism for near-term interest rate cuts from the Federal Reserve, as the central bank is less likely to lower borrowing costs while inflation remains elevated. This shift in expectations for monetary policy triggered a broad sell-off across the market, as traders adjusted to the possibility of interest rates remaining higher for longer.
American Express is down 15.9% since the beginning of the year, and at $313.36 per share, it is trading 18.6% below its 52-week high of $384.89 from December 2025. Despite the year-to-date decline, investors who bought $1,000 worth of American Express’s shares 5 years ago would now be looking at an investment worth $1,719.
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