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| American International Group Inc. is cutting hundreds of jobs at its unit that handles mortgage lending.Around 150 American General Financial Services branches are being closed down, an AIG spokesman confirmed in a statement. Around 1,200 branches will remain.
Where possible, employees will be reassigned, according to the spokesman. The move was attributed to “weak market conditions and liquidity constraints.” The consolidation will result in about 500 layoffs, the statement said. One published report indicated that American General employed around 8,000 as of Dec. 31, 2008, following a round of 380 layoffs in the fourth quarter. The current round of layoffs would leave total headcount around 7,500. American General reports that it has 5,000 “loan specialists” who provide mortgage services. AIG, which has lost a fortune on the credit default swap portfolio at subsidiary AIG Financial Products Corp., last year received an emergency $85 billion loan from the Federal Reserve Bank of New York. In November, it received $40 billion under the Troubled Asset Relief Program. AIG, which owned $18.4 billion in mortgages as of Dec. 31, noted in its fourth-quarter 2008 earnings report a $27 million pre-tax charge tied to the consumer finance division’s decision to cease wholesale mortgage originations. |
