American Express Becomes the Latest Company To Announce Massive Layoffs Over the AI Boom

American Express has become the latest company to announce massive layoffs over the artificial intelligence boom.

Company CEO Stephen Squeri said on Friday that the company will eliminate 5% of the global workforce, which at the end of last year amounted to some 77,000 employees.

"We've got good momentum, but to accelerate innovation and win over the next few years, we needed to become more agile and efficient organization," Squeri said when presenting the company's quarterly results.

"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.

American Express CFO Cristophe Le Caillec then told CNBC that company leadership is seeking 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 announcement comes a day after Barclays announced plans to eliminate some 5,000 jobs as it turns to AI and organizational changes to lower costs and free up money for investment.

The reductions, disclosed Thursday alongside its third-quarter results, will fall heavily on support operations. About 60% of the cuts are expected to affect support functions, including developers, according to the bank's earnings presentation.

The announcement puts technology workers among those exposed to the restructuring, alongside other employees supporting the bank's operations. Barclays described the changes as part of a broader effort to simplify its organization and improve efficiency through technology.

The bank expects the workforce reductions to be completed by the end of the year. Chief Financial Officer Anna Cross told reporters that approximately 1,000 positions had already been eliminated, with another 4,000 expected to go before year-end.

In its earnings statement, Barclays said it was "structurally reducing the cost base to generate capacity for investment." Its presentation also identified "organisational simplification and technology change efficiency driven by AI" as an outcome of the measures.

Those descriptions place artificial intelligence within a wider restructuring program. The disclosures do not establish that every eliminated position will be directly replaced by an AI system, or specify how many developer jobs will disappear.

The broader picture shows a contrasting image. New applications for U.S. unemployment benefits have fallen to one of their lowest levels in more than five decades, but a closer look at the labor market reveals a difficult reality for Americans who are searching for work.

Initial claims dropped by 6,000 to a seasonally adjusted 194,000 in the week ending Oct. 17, according to figures released Thursday by the U.S. Department of Labor. That was the lowest reading since July, when claims reached 189,000, a level not seen since 1969.

But at the same time, about 1.94 million Americans had been unemployed for 27 weeks or longer in September, representing 27.1% of all unemployed workers, according to the Bureau of Labor Statistics' September employment report.

The number was little changed from August, but it means more than one in four unemployed Americans had been without work for at least six months.