Shares of American Express fell in premarket trading on Friday after the credit-card company announced plans to eliminate about 5% of its global workforce.
American Express CEO Stephen Squeri on the third-quarter earnings call said the credit-card company took a $336 million restructuring charge in the quarter which is expected to result in the elimination of around 5% of global positions.
"We've got good momentum, but to accelerate innovation and win over the next few years we need to become a more agile and efficient organization," Squeri said.
"When completed, we believe this exercise will help us operate and execute more effectively and give us greater capacity to invest in our business priorities," he added.
America Express stock fell 2.4% $317.52 in premarket trading on Friday after ending Thursday up 0.5% at $325.17. The stock has fallen 12% this year as of the closing bell Thursday.
Shares, however, have risen 7% and reclaimed their 50-day moving average since closing at $302.09 on Oct. 1, marking a recent bottom for the stock.
The restructuring plans came as Amex's third-quarter earnings illustrated that high earners were still spending plenty of money in the quarter as the company's mostly affluent cardholder base remained resilient in the face of higher interest rates and sticky inflation.
Overall cardmembers' spending, which American Express refers to as billed business, rose 8% to $454 billion on a foreign-exchange adjusted basis. That was down slightly from the $455.8 billion in the second quarter.
Amex said its business benefited from increased card member spending and higher net interest income supported by growth in card balances, and strong card fee growth.
Investors track results from the New York-based business closely because its cards are so widely used by high earners and large companies.
American Express on Friday posted third-quarter adjusted earnings of $4.68 a share, up from $4.14 a year ago and coming in above Wall Street's expectation of $4.50. Total revenue grew 8.9% to $20.06 billion, slightly missing the analyst consensus view of $20.12 billion, according to FactSet.
Amex also narrowed its full-year adjusted earnings guidance to $17.60 to $17.90 a share. The credit card company added it remains on track for full-year revenue growth of 10%. The previous guidance called for adjusted earnings of $17.30 to $17.90 a share. Wall Street expects full-year adjusted earnings of $17.61 a share, according to FactSet.
While interest rates and inflation have many worried about the broader economy and the stock market, Amex and other businesses have been doubling down on efforts to attract high earners.
Amex and Airbnb on Thursday announced a partnership that will bring more than 1 million of Airbnb's listings to Amex's travel portal and allow cardholders to earn rewards when booking stays.
Morgan Stanley analyst Matthew Cost said in a research note that the partnership further enhances Amex's platinum card's premium travel offerings.
"We view Amex's new 'exclusive' partnership with Airbnb as an incremental positive for its premium card strategy, and another example of how the company is able to deliver value to premium cardmembers with unique partnerships with quality brands," Cost said
Capital One, meanwhile, said Tuesday it intends to lean into premium credit-card perks that American Express and JPMorgan Chase are known for.
Capital One CEO Richard Fairbank told analysts Tuesday the bank would increase its marketing spend as it takes on competitors ramping up their own efforts to get in front of more customers. This comes more than a year after Capital One closed its $35 billion acquisition of Discover Financial Services.
Investors will watch for Capital One's progress in its ability to draw in more affluent spenders and maintain strong credit quality as it continues to integrate both Discover and Brex, an acquisition it closed in April.
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