TLDR
- Block announced layoffs of over 4,000 employees (~40% of its workforce), citing AI-driven efficiency
- The news sparked fears that AI could disrupt traditional financial companies like American Express
- American Express (AXP) stock fell nearly 8% on Friday
- Heavy put option activity showed traders bracing for further declines, with the put-to-call ratio hitting 2.6
- AXP is down 11.39% year-to-date, with implied volatility rising sharply
American Express $AXP dropped close to 8% on Friday after Block’s announcement of sweeping layoffs rattled investor confidence across the financial sector.
Block said it was cutting more than 4,000 jobs, roughly 40% of its total workforce. The company made the announcement alongside its fourth-quarter and full-year 2025 earnings report.
Block founder and CEO Jack Dorsey framed the cuts as a product of AI-powered efficiency. In a letter to shareholders, he wrote: “A significantly smaller team, using the tools we’re building, can do more and do it better.”
Dorsey added that “intelligence tool capabilities are compounding faster every week,” signaling this is not a one-time restructuring but part of a longer trend.
For investors, the message landed hard. If a tech-forward digital payments company like Block is slashing nearly half its staff due to automation, the thinking goes, what does that mean for older, more traditional players?
That question put American Express in the crosshairs. Despite being a well-established credit card giant with decades of tech investment behind it, the market treated AXP as vulnerable.
Investors sold off the stock quickly. AXP lost nearly 8% across the trading session, closing at $307.95. The day’s range ran from $307.67 to $321.01.
Options Market Signals More Concern
The selloff wasn’t just in the stock itself. The options market told a similar story.
Roughly 22,400 put contracts changed hands on Friday, about five times the normal daily volume. Much of that activity was concentrated on March and June 2026 $280 strike puts, with around 4,700 contracts at those levels.
The put-to-call ratio jumped to approximately 2.6. That’s a clear sign traders were paying up for downside protection, not optimism.
At-the-money implied volatility climbed by more than six points, reflecting rising expectations for future price swings in AXP.
Broader Context
Friday’s drop doesn’t exist in isolation. AXP is now down 11.39% year-to-date, a rough start to 2026 for a stock that hit a 52-week high of $387.49 not long ago.
Average daily trading volume runs around 3.1 million. On Friday, volume came in at just 379,000, suggesting the move was driven more by fear than mass liquidation.
American Express has a market cap of roughly $212 billion, a gross margin of 60.65%, and a dividend yield of 1.06%.
The company’s technical sentiment signal currently reads “Buy,” though that hasn’t stopped the stock from sliding.
AXP has long used AI within its own operations, and has adapted to technological shifts over many decades. Still, Block’s announcement was enough to send investors looking for the exits on Friday.
The put option activity, concentrated in the March and June 2026 timeframes, suggests the market is pricing in continued uncertainty for AXP well into mid-year.
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