Business, Consumer Spending & Employment
American Express Raises Forecast While Planning 3,500 Job Cuts
Affluent card spending remains strong, but the company is cutting about 5 percent of its workforce as expenses rise.
Profit strength accompanies restructuring
American Express raised its 2026 adjusted earnings forecast while announcing plans to eliminate about 3,500 jobs, or 5 percent of its global workforce, Reuters reported. Third-quarter adjusted earnings beat analyst expectations, and revenue rose 9 percent to $20.1 billion. Strong results do not make layoffs contradictory. Companies may cut costs while profitable to protect margins or redirect investment. The relevant questions are which functions change and whether service quality declines.
Affluent customers continue spending
Total card spending increased 8 percent to $454 billion, with travel and entertainment purchases rising 10 percent. Airline and restaurant spending also grew. American Express serves a customer base that may be more resilient than the typical household, so its results should not be treated as a complete measure of consumer health. They do show continued demand in premium categories despite inflation and higher borrowing costs.
Expenses are rising with revenue
Company expenses increased 9 percent to $14.5 billion, Reuters reported, reflecting marketing and card-benefit investment as well as operations. Richer rewards can attract and retain customers but also create long-term obligations. Management should explain whether benefit costs are producing durable fee and spending growth. Investors need to distinguish restructuring savings from cuts that merely postpone technology, compliance or customer-service needs.
Job cuts require operational clarity
The company described the restructuring as a way to become more agile and efficient. Employees need timely information about selection, severance, benefits and transition support. Customers need assurance that fraud response, dispute handling and compliance remain adequately staffed. Automation can reduce repetitive work, but weak oversight can create costly errors. A headcount target is not itself an operating strategy.
Credit quality remains a key watchpoint
High-income spending can remain strong while other borrowers face stress. Card companies should disclose delinquencies, charge-offs, loan growth and reserves alongside purchase volume. Rising rates increase balances more quickly for customers who carry debt. Rewards are valuable only when they do not encourage unaffordable spending. Consumers should pay attention to annual fees and interest, not merely headline points or lounge access.
Forecasts still depend on the economy
American Express expects adjusted earnings of $17.60 to $17.90 per share for the year, above the midpoint of analyst expectations reported by Reuters. Guidance can change if travel slows, unemployment rises or credit losses increase. The company’s mix provides resilience but not immunity. Regulators and investors also should watch whether cost reductions weaken controls in a heavily regulated business. Quarterly reports should disclose restructuring charges and realized savings separately. The combination of higher profit expectations and job cuts illustrates a broader corporate pattern: strong current demand paired with aggressive preparation for uncertain costs and technology-driven change.
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