Updated version 4 - American Express raises its profit forecast for 2026 and plans to cut 5% of its workforce.

Paragraphs 2 to 5 supplement layoff details; paragraph 15 includes investor comments

Manya Saini/Arasu Kannagi Basil

Reuters, October 23 - American Express AXP.N on Friday raised its 2026 profit forecast, beating Wall Street expectations, and announced as part of its restructuring plan, a global workforce reduction of 5%, or about 3,500 jobs.

After CEO Stephen Squeri told analysts that the company has strong momentum but needs to become a more "agile and efficient" organization, its share price in early trading fell recently by 2.5%.

In 2026, companies worldwide are ramping up layoffs (link), with several financial institutions, including Barclays, which announced layoffs this week, attributing cuts to efficiency gains and investments in artificial intelligence.

American Express has performed strongly this year, mainly due to spending by its high-net-worth customers. However, as the company boosts marketing spend and launches credit cards with new benefits, investors have been closely monitoring its (link) expense growth. The stock is down 12% so far this year, underperforming the S&P 500 Index .SPX.

The company's third-quarter consolidated expenses were $14.5 billion, up 9% from a year earlier.

According to data compiled by the London Stock Exchange Group (LSEG), the company expects full-year adjusted earnings per share to be between $17.60 and $17.90, with the midpoint well above the expected $17.63.

High-net-worth spending remains resilient

By targeting affluent consumers with high credit scores and greater disposable income, this credit card giant has built a moat around its business, insulating it from broader economic slowdowns and uncertainties.

In the third quarter, American Express’s travel and entertainment spending rose 10% year-on-year, with airline spending surging 13% and restaurant spending up 9%, leading the way.

Chief Financial Officer Christophe Le Caillec, referring to the airline segment in an interview with Reuters, stated: "Of course, this is partly driven by higher average ticket prices and airfares."

In recent months, airlines globally have increased ticket prices, driven by surging fuel costs amid Middle East conflicts and disruptions to global oil supply.

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Billed business volume (the total spending across all American Express-issued credit cards) grew 8% in the third quarter to $454 billion. Revenue rose 9% to $20.1 billion.

"High-end spending remains resilient, with no signs of pressure on this segment, which is in stark contrast to lower-income consumers," said David Wagner, Head of Equities and Portfolio Manager at Aptus Capital Advisors.

The company has invested heavily in attracting younger consumers, especially Generation Z and millennials, to build long-term customer relationships and expand global market share for sustained growth.

For the quarter ended September 30, American Express reported adjusted earnings per share of $4.68, far exceeding the Wall Street estimate of about $4.48.

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