Visa's Earnings Beat Expectations but Plans to Lay Off 2,600 Employees as AI Transformation Takes Center Stage

Global payment leader Visa (V-US) announced its third-quarter earnings for the fiscal year 2026, ending June 30. Benefiting from resilient consumer and corporate spending, as well as continued growth in cross-border payments, revenue and profits both exceeded market expectations. However, the company simultaneously announced plans to lay off approximately 7%, or about 2,600 employees, to drive organizational efficiency and AI (Artificial Intelligence) transformation. The news caused the stock price to fall after hours.

Visa's third-quarter revenue reached $116 billion, up 14% year-over-year. Adjusted earnings per share (EPS) were $3.32, up 11% from the same period last year, exceeding market estimates of $114 billion in revenue and $3.23 in earnings per share. Revenue for the same period last year was $102 billion, and earnings per share were $2.69.

On the operational data front, third-quarter payment transaction volume (Payments Volume) increased by 10% year-over-year, cross-border transaction volume (Cross-border Volume) grew by 13%, and processed transaction volume (Processed Transactions) also increased by 10%, reflecting that global consumption and commercial activities remain robust.

Visa CEO Ryan McInerney stated that consumer and corporate spending continue to demonstrate resilience, and the company's strategies continue to drive steady growth in consumer payments, business payments, fund transfers, and value-added services.

He stated that as an important platform for the global payment network, Visa is accelerating the speed of product design, development, and launch to help customers and partners seize new business opportunities in the payment industry and drive long-term growth.

Despite the earnings beating expectations, the market remains cautious about the layoffs and restructuring plans. Visa closed regular trading on Tuesday up 1.1%, at $366.59, creating a new 52-week closing high and the highest closing price since June 12. The stock once touched $371.16 during trading. However, the stock price fell approximately 2.3% after the earnings report was released, to $358.31.

As of Tuesday's close, Visa's stock price has risen 4.5% so far this year, with a 12-month gain of approximately 4.4%, while the S&P 500 index has risen 0.2% over the same period.

Notably, a few hours before the earnings report was released, Visa announced the initiation of a new round of workforce adjustments, planning to eliminate approximately 7% of employees, about 2,600 positions, primarily concentrated in technology and product teams, to improve organizational efficiency and accelerate the speed of innovation.

Ryan McInerney stated in an internal letter to employees that Visa is entering a new era of business payments, and the company's multiple strategies adopted in recent years have established a good foundation for growth. To seize future development opportunities, Visa must continue to adjust its way of working, and AI is rapidly changing the way companies complete work.

Market analysis pointed out that AI has become one of the important factors in Visa's layoffs this time. As more work processes can be automated through AI, the company is expected to improve operational efficiency and reduce personnel costs. However, analysts also believe that layoffs are not entirely driven by AI, but are part of Visa's continuous strategic transformation in recent years.

In addition to accelerating AI applications, Visa has actively expanded its global market share in recent years and has also been laying the groundwork for new payment areas, including stablecoin (Stablecoin) payments, cross-border payments, and business payments, hoping to expand future growth sources.

In terms of capital allocation, Visa spent $49 billion in the third quarter, repurchasing approximately 14.5 million shares of Class A common stock at an average price of $330.71 per share. As of June 30, the company still has $284 billion in stock repurchase authorization remaining.

The board of directors also announced that a cash dividend of $0.67 per share of Class A common stock will be distributed, with the record date set for August 11 and the payment expected on September 1.

In recent months, AI investment-driven corporate restructuring has become a common trend in the technology industry. Companies such as Intel (INTC-US), Cisco (CSCO-US), and Meta Platforms (META-US) have all stated that layoffs are related to increased AI investment and resource reallocation. The market believes that Visa's simultaneous promotion of organizational streamlining and AI transformation demonstrates that the financial technology industry is also accelerating into a new round of AI-driven efficiency competition.