TLDR
- Block declared layoffs of more than 4,000 employees (around 40% of its workforce), attributing it to AI – driven efficiency.
- The news triggered concerns that AI might disrupt traditional financial firms such as American Express.
- American Express (AXP) stock declined nearly 8% on Friday.
- High – volume put option activity indicated that traders were preparing for further drops, with the put – to – call ratio reaching 2.6.
- AXP has fallen 11.39% year – to – date, and implied volatility has increased significantly.
American Express $AXP dropped nearly 8% on Friday after Block’s announcement of extensive layoffs shook investor confidence across the financial sector.
Block stated that it was cutting over 4,000 jobs, approximately 40% of its total workforce. The company made this announcement along with its fourth – quarter and full – year 2025 earnings report.
Block founder and CEO Jack Dorsey described the cuts as a result of AI – powered efficiency. In a letter to shareholders, he wrote: “A much smaller team, using the tools we’re developing, can achieve more and do it better.”
Dorsey also added that “the capabilities of intelligence tools are growing at an accelerating pace every week,” indicating that this is not a one – time restructuring but part of a long – term trend.
For investors, the message had a strong impact. If a tech – forward digital payments company is slashing nearly half of its staff due to automation, the thought is, what does this mean for older, more traditional players?
That question put AXP in the spotlight. Despite being a well – established credit card giant with decades of technology investment, the market regarded AXP as vulnerable.
Investors quickly sold off the stock. AXP lost nearly 8% during the trading session, closing at $307.95. The day’s trading range was from $307.67 to $321.01.
Options Market Signals More Concern
The sell – off was not limited to the stock itself. The options market told a similar story.
Approximately 22,400 put contracts were traded on Friday, about five times the normal daily volume. A large portion of that activity was focused on March and June 2026 $280 strike puts, with around 4,700 contracts at those levels.
The put – to – call ratio jumped to about 2.6. This is a clear indication that traders were paying for downside protection rather than being optimistic.
At – the – money implied volatility rose by more than six points, reflecting increasing expectations of future price fluctuations in AXP.
Broader Context
Friday’s drop is not an isolated event. AXP is now down 11.39% year – to – date, a tough start to 2026 for a stock that reached a 52 – week high of $387.49 not long ago.
The average daily trading volume is around 3.1 million. On Friday, the volume was only 379,000, suggesting that the move was driven more by fear than mass liquidation.
American Express has a market capitalization of approximately $212 billion, a gross margin of 60.65%, and a dividend yield of 1.06%.
The company’s technical sentiment signal currently shows “Buy,” but that hasn’t stopped the stock from falling.
AXP has long used AI in its operations and has adapted to technological changes over many decades. Still, Block’s announcement was enough to make investors look for an exit on Friday.
The put option activity, concentrated in the March and June 2026 time frames, suggests that the market is factoring in continued uncertainty for AXP well into mid – year.
