Crypto World
AXP Shares Plunge 8% as Block’s AI-Driven Workforce Cuts Trigger Financial Sector Alarm
TLDR
- Block revealed plans to eliminate more than 4,000 positions (approximately 40% of staff), attributing the decision to AI capabilities
- The announcement triggered concerns about potential AI-driven disruption facing legacy financial institutions like American Express
- AXP shares plummeted nearly 8% during Friday’s trading session
- Significant put option volume indicated traders positioning for additional downside, with put-to-call ratio reaching 2.6
- Year-to-date, AXP has declined 11.39% while implied volatility surged
Shares of American Express $AXP plummeted nearly 8% during Friday trading after Block’s dramatic workforce reduction announcement sent shockwaves through financial services stocks.
Block revealed plans to eliminate over 4,000 positions, representing approximately 40% of its employee base. The disclosure came as part of the company’s fourth-quarter and full-year 2025 financial results.
In explaining the dramatic restructuring, Block’s founder and CEO Jack Dorsey pointed to artificial intelligence as the driving force. His shareholder letter 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,” making clear this represents an ongoing transformation rather than an isolated cost-cutting measure.
The announcement resonated powerfully with market participants. The logic was straightforward: if a digitally-native payments platform like Block can eliminate nearly half its workforce through AI implementation, what implications does this hold for established financial institutions?
This reasoning placed American Express squarely in investors’ sights. Even with its robust infrastructure and substantial technology investments spanning decades, the market viewed AXP as potentially exposed to similar pressures.
The selloff was swift and substantial. AXP shed nearly 8% throughout the session, settling at $307.95. Intraday trading ranged between $307.67 and $321.01.
Options Activity Reflects Heightened Anxiety
The equity decline was accompanied by notable derivatives market movement that reinforced bearish sentiment.
Approximately 22,400 put contracts traded on Friday, representing roughly five times typical daily volume. Considerable interest centered on March and June 2026 $280 strike puts, which saw approximately 4,700 contracts traded.
The put-to-call ratio surged to around 2.6, a definitive indication that traders were securing downside hedges rather than positioning for upside moves.
At-the-money implied volatility increased by over six points, signaling heightened expectations for significant price movements in AXP shares going forward.
Wider Market Picture
Friday’s decline extends a challenging period for the stock. AXP has now surrendered 11.39% year-to-date, marking a difficult opening to 2026 for shares that recently touched a 52-week peak of $387.49.
Typical daily trading volume averages approximately 3.1 million shares. Friday’s volume registered just 379,000, indicating the decline was sentiment-driven rather than the result of widespread selling pressure.
American Express maintains a market capitalization around $212 billion, operates with a gross margin of 60.65%, and offers shareholders a dividend yield of 1.06%.
Current technical indicators for the company show a “Buy” signal, though that guidance hasn’t prevented the recent downward trajectory.
AXP has incorporated AI technologies into its business operations for years and has navigated numerous technological transitions throughout its history. Nevertheless, Block’s workforce announcement proved sufficient to prompt Friday’s investor exodus.
The concentration of put option interest in March and June 2026 expirations indicates market participants are anticipating sustained volatility for AXP shares through the middle of the year.
