TLDR
- Block revealed plans to eliminate more than 4,000 positions (~40% of total staff), attributing the decision to artificial intelligence capabilities
- The announcement triggered anxiety that AI automation could upend legacy financial institutions like American Express
- American Express (AXP) shares dropped nearly 8% during Friday’s session
- Significant put option trading indicated investors preparing for additional downside, with put-to-call ratios reaching 2.6
- AXP has declined 11.39% year-to-date, accompanied by surging implied volatility
American Express $AXP experienced a sharp decline of nearly 8% Friday following Block’s revelation of extensive workforce reductions that shook confidence throughout the financial services industry.
Block disclosed plans to eliminate over 4,000 positions, representing approximately 40% of its entire employee base. The workforce reduction was unveiled during the company’s fourth-quarter and full-year 2025 earnings announcement.
Block’s founder and CEO Jack Dorsey positioned the workforce cuts as a consequence of artificial intelligence-driven productivity gains. In his shareholder communication, Dorsey stated: “A significantly smaller team, using the tools we’re building, can do more and do it better.”
Dorsey emphasized that “intelligence tool capabilities are compounding faster every week,” suggesting this represents an ongoing transformation rather than an isolated restructuring event.
The implications for investors proved unsettling. When a digitally-native payments technology company like Block eliminates nearly half its workforce through automation, market participants immediately questioned the ramifications for established, legacy institutions.
This concern directly impacted American Express. Even with the credit card behemoth’s substantial technology infrastructure built over decades, the market viewed AXP as susceptible to similar disruption.
The selloff was swift and decisive. AXP surrendered nearly 8% of its value throughout the trading day, settling at $307.95. The stock fluctuated between $307.67 and $321.01 during the session.
Options Activity Reveals Heightened Anxiety
The negative sentiment extended beyond equity trading. Options market behavior reflected comparable unease.
Approximately 22,400 put contracts traded Friday, representing roughly five times typical daily activity. The bulk of this volume centered on March and June 2026 $280 strike puts, with approximately 4,700 contracts at those strike prices.
The put-to-call ratio surged to roughly 2.6. This metric clearly demonstrated traders were purchasing downside insurance rather than positioning for upside potential.
At-the-money implied volatility increased by over six points, indicating market participants anticipate heightened price fluctuations for AXP moving forward.
Wider Market Perspective
Friday’s decline represents part of a challenging 2026 for the stock. AXP has fallen 11.39% year-to-date, a difficult beginning for a security that recently touched its 52-week peak of $387.49.
Typical daily trading volume averages approximately 3.1 million shares. Friday’s session registered just 379,000 shares, implying the price movement stemmed more from sentiment shifts than large-scale selling pressure.
American Express maintains a market capitalization near $212 billion, posts a gross margin of 60.65%, and offers shareholders a dividend yield of 1.06%.
The stock’s technical sentiment indicator currently displays a “Buy” signal, though this hasn’t prevented the recent downward trajectory.
AXP has incorporated artificial intelligence into its operations for years and has successfully navigated technological transitions throughout its history. Nevertheless, Block’s workforce announcement proved sufficient to trigger Friday’s investor exodus.
The concentrated put option activity in March and June 2026 contracts indicates market participants are anticipating sustained uncertainty surrounding AXP through the middle of the year.
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