Life insurer mulls global job cut plan impact on Australia

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AIG has said it will ensure any changes to the Australian operations as a result of the group’s plan to cut its global workforce by 3% are made with “respect, transparency and fairness”.

However, it says it is too early to discuss how the group’s plan to cut 3% of the global workforce will affect Australia.

AIG is pursuing a number of initiatives to reduce expenses and improve efficiencies including centralising work streams into lower cost locations and creating a more streamlines organisation.

The insurer incurred a pre-tax severance charge of $239m associated with these initiatives primarily related to AIG Property Casualty in the fourth quarter of 2013.

Aig Group CEO and president Robert Benmosche said: “Our fourth quarter severance charge represents another step in AIG’s continued transformation. We are increasingly a more agile, focused, and sustainable company. As we think about the long- term future of our company, we must be able to more efficiently meet and exceed the evolving expectations of our global customer base.”

It is not yet clear if, and how many, roles in Australia will be affected. An AIG spokesperson said: “As Mr Benmosche has made clear, the changes will impact all levels of the organisation in all geographies, but it is too early to discuss precise details of the impact here in Australia.”

However, they stressed that the insurer would communicate changes.

“Rest assured that we will comply fully with Australian employment regulations and ensure any changes to our operations here are made with respect, transparency and fairness. Our goal is to streamline our business to serve Australian customers more effectively and to ensure AIG’s ongoing success to protect jobs and enable sustainable long-term growth.”

The news came as AIG released its fourth quarter and full year results for 2013. Fourth quarter 2013 after- tax operating income attributable to AIG of $1.9bn compared to $320m in Q4 2012.

Full year 2013 pre-tax insurance operating earnings exceed $11bn; growth in all core insurance operations. After-tax operating income for the full year of 2013 was $7.5bn, up from $7.3bn in 2012.