The news: Capital One laid off over 1,100 Discover employees, per Banking Dive, continuing a trend of job cuts in the financial services industry.

How we got here: Layoffs aren’t uncommon after mergers  as the combined entity removes redundancies to increase efficiency. 

But other payments and banking giants have also slashed headcount in 2026:

• Block eliminated 40% of its workforce in February. CEO Jack Dorsey said AI would enable “a new way to work.”
• Morgan Stanley laid off 2,500 workers across all divisions, per WSJ.
• And Citigroup’s CEO Jane Fraser hinted at future job cuts in a memo to staff, which could total around 1,000 heads, per Bloomberg.

All of these companies have attributed the cuts—in part or in full—to the rise of artificial intelligence or current economic conditions. Some companies also argue that they overhired during the pandemic, leading to rebalancing.  

Implications for payment providers: Payment companies are in for a bumpy ride. 

US employers slashed 92,000 roles in February, per the Labor Department, and the unemployment rate rose to 4.4%. To make matters worse, the burgeoning war in Iran sent the price of gasoline skyward—resurrecting the spectre of supply shock stagflation.

Those conditions could have far-reaching consequences for providers. Stagflation is a recipe for lower consumer spending—which means lower interchange—and higher defaults.

As economic conditions teeter, payment providers should consider targeting consumers with helpful financial tools, from AI-powered in-app budgeting tools to personal or hardship loans for unintended financial shortfalls.