Insurance giant American International Group, or AIG, dismissed four senior members of its real estate business, including the division’s chief executive, as part of a wave of layoffs with the goal of cutting costs.
AIG Global Real Estate president and CEO Robert Gifford was joined in the layoffs by Donald Huffner, the division’s head of Americas, Brooks Mohrman, who managed the firm’s investments in Mexico, and general counsel Richard D’Alessandri.
Douglas Tymins, who oversees AIG Global Real Estate’s affordable housing unit, will assume Gifford’s role as CEO of the division. AIG hired Gifford in 2009 as the company was recovering from its near-collapse during the global financial crisis.
The insurer has been in the real estate business since 1987 and grew into one of the world’s largest property investors, with roughly $25 billion in assets before the financial crisis, according to the Wall Street Journal.
While it considered selling off the real estate unit following its much-publicized government bailout, AIG eventually repaid a large loan from the Federal Reserve Bank of New York and shifted its strategy from winding down property investments to growing the division.
The job cuts, however, are part of a plan to cut more than 300 senior positions at the insurer, with AIG CEO Peter Hancock having announced the company will layoff 23 percent of the top 1,400 members of its senior management.
AIG activist investor Carl Icahn has criticized Hancock for failing to reaching profitability targets and is seeking a split-up of the company, and the insurer has moved jobs to lower-cost locations like Texas and the Philippines while also shedding assets. [WSJ] – Rey Mashayekhi