American Express plans to reduce its headcount by nearly 4.5% as part of a restructuring as competition continues to intensify amid increased industry use of artificial intelligence.

The New York-based card company will cut about 3,500 of its approximately 78,000 workers worldwide, a spokesperson for the company said, in conjunction with announcing its third-quarter earnings report Friday. The spokesperson declined to provide additional details.

The headcount was higher than the 76,800 workers the company had at the end of last year, according to its annual report.

Amex CEO Stephen Squeri said the workforce contraction was focused on streamlining the company’s operations, bolstering productivity and speeding up decision-making.

“We've got good momentum, but to accelerate innovation and win over the next few years, we needed to become a more agile and efficient organization,” he told analysts on a Friday earnings call.

Company executives on the call provided few additional details about the employee job cuts, other than Squeri explaining how he asked managers this year to identify the options for improving operations.

The move to cut costs comes as competition continues to ramp up. Large banks that issue cards, including JPMorgan Chase, and their card network partners Visa and Mastercard, continue to challenge Amex in the premium consumer card market, with improved loyalty programs and airport lounge offerings.

On the commercial front, new entrants, including Brex and Ramp, are intensifying competition for corporate customers, including with the use of AI agents. Brex was acquired this year by Amex rival bank Capital One, which also completed a purchase of card rival Discover Financial last year.

“Those are two of the big competitors that are out there,” Squeri told analysts on the call in response to a question. “What they unlocked in this segment was sort of the automation and the expense management.” 

“What you'll see from us as we move forward, you will see the introduction into this platform of more agents,” he added.

While there is an opportunity for AI to improve the company’s internal operations, Squeri said, he focused mainly on how AI will be used in the future by customers to consume the company’s services in new ways.

For instance, that technology will allow the company to better personalize restaurant services for its premium customers who make reservations through its partner Resy, tailoring online services to customer’s particular tastes, Squeri said. He also discussed using the AI agent ChatGPT to personalize pitches for Amex’s restaurant and travel services.

Overall, demand from the company’s card customers, which historically have tended to be more affluent, is healthy, the company’s executives told analysts on the call. 

Amex’s billed business rose 8% to $454 billion for the quarter, on a foreign-exchange adjusted basis, over the year-earlier quarter, the company reported. Still, that was down from 9% for the first half of the year, according to the company’s earnings presentation.

“Strong and consistent” is how the company’s chief financial officer, Christophe Le Caillec, described the current customer demand.

Amex third-quarter net income jumped 28% to $3.71 billion as the company’s revenue rose 9% to $20 billion, according to the Friday earnings press release. 

In addition to the $336 million charge during the quarter associated with restructuring, the company had a gain from the sale of the company’s travel services business this year and took account of a penalty the company was forced to pay to settle an enforcement action brought by the Office of the Comptroller of the Currency. That $350 million fine was due to the bank’s alleged failures to follow anti-money laundering regulations.

Overall, the company’s expenses rose 9% to $14.5 billion, including an 11% increase in spending for marketing, according to the earnings presentation.

Amex is seeking to bolster its position with lower-income customers too by partnering with companies, such as Bread Financial and Synchrony, but it will avoid partnering with the big-bank rivals on that front because those alliances didn’t work out in the past, Squeri said.

“It's allowing us to reach more segments of the population that we traditionally wouldn't reach,” Squeri said of working with companies like Bread Financial and Synchrony. “We will continue to see, I believe, more and more of those deals be done.”