American Express is cutting 5% of its workforce to "prepare for AI." The robots haven't arrived. Amex is laying people off in advance, like a man who dumps his girlfriend because he's heard Tinder exists.
CEO Stephen Squeri announced it Friday, alongside third-quarter earnings. The restructuring charge is $336 million. That is the price of getting ready.
Read that again. Amex is paying $336 million to prepare for a thing that will, per the plan, save it money later. It is a gym membership for a company that has never seen a treadmill.
The AI has not been hired yet. Nobody has been replaced by it. The employees were simply shown the door in anticipation of a successor who is still in orientation, or possibly still a PowerPoint slide.
A 5% cut is clean and surgical. Not 4%. Not 6%. Somebody in a conference room looked at a spreadsheet and found exactly the right amount of human to remove. I hope that person got a plaque and a lanyard.
Retail traders will read this and buy calls. They always do. A company says "AI" and fires people, and the traders hear "Number go up." You cannot stop them. They once bought a stock because the ticker looked friendly.
The people losing their jobs will get a nice email, I assume. It probably used the word "journey." The journey ends Friday at 5 p.m. Please return your badge.
Is the stock chart important? No. The chart is a seismograph for feelings. Amex could announce it is replacing every employee with a single golden retriever named Gary, and the 50-day moving average would barely blink.
Gary would still outperform the guy who bought at the top.
Photo by on Unsplash
Leave a Comment