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American Express revealed plans Friday to cut around 3,500 jobs – about 5 percent of its global workforce – as the company’s executives admitted that artificial intelligence was a factor. The cuts mark Amex’s first major round of layoffs in nearly a decade. The credit card giant said the move would streamline operations while allowing it to continue investing in the business but did not specify which departments or locations would be affected.
Chief Executive Stephen Squeri said the company wants to reduce management layers, speed up decision-making and position for future growth, according to The Wall Street Journal . AI is also a factor in the restructuring. Chief Financial Officer Christophe Le Caillec told CNBC that the changes would help American Express become “leaner, more agile, and also to prepare for AI .” Amex’s layoffs come after other major staff cuts at banks and credit card companies, including Barclays and Citigroup, as financial firms become the latest white-collar industry to feel the intense impacts of AI.
American Express said the layoffs will help streamline operations, as well as help it ‘prepare for AI’ (Getty) Economists are increasingly concerned about the impacts of AI on millions of white-collar jobs, including customer service, bookkeeping, payroll and HR, The New York Times reported in June. Many of these jobs offer middle-class wages without requiring a college degree and are disproportionately held by women, according to the outlet. An Axios-Generation Lab poll of 1,075 Americans ages 18 to 34 released in August found that 27 percent believe they or someone they know has lost a job because an employer replaced the position with AI.
Le Caillec spoke Friday about how American Express could rely more on AI in the future. “You don’t want to automate processes that are not optimally structured,” he said. “So what we’re doing here is to reduce layers and increase spans of controls, so that we can automate and take advantage of AI in the coming quarters and the coming years.” The layoffs come as American Express reported higher profits and revenue in the third quarter as customers continued spending on its cards.
The company posted net income of $3.71 billion, up 28 percent from $2.9 billion a year earlier. The American Express cuts come a day after Barclays announced plans to cut 5,000 jobs, or about 5 percent of its global workforce, by the end of the year. Barclays Group CEO CS Venkatakrishnan said the job cuts reflect the bank’s investment in technology to simplify operations and improve efficiency.
"AI has an important role to play and may have a more important role to play in the future. We will employ the AI at scale," he said, according to the BBC . "But AI is the icing on the cake, not the cake.
Because you need to do the infrastructure build to get the benefits of AI.” About 60 percent of the job cuts will affect support functions, including developer roles, Barclays said. Earlier this year, Citigroup cut about 10 percent of its workforce, around 20,000 jobs. HSBC also announced it is considering a multiyear plan to cut around 20,000 roles.
Standard Chartered, meanwhile, has announced plans to eliminate 15 percent of its workforce, around 7,800 jobs, by 2030.
Source: The Independent
