AIG raises dividend as it swings to profit, plans job cuts
(Reuters) - Insurer American International Group Inc (AIG.N: Quote) on Thursday raised its quarterly dividend by 25 percent and reported it swung to a profit in the fourth quarter, compared with a year-earlier loss, sending its shares up in after-market trading.
AIG raised its quarterly dividend to 12.5 cents per share from 10 cents and authorized a share buyback of up to another $1 billion.
The company, which was nearly wiped out by its derivative bets during the financial crisis, resumed paying dividends last year after it repaid the $180 billion taxpayer bailout it received in 2008.
AIG Chief Executive Robert Benmosche, commenting on a charge taken in the fourth quarter, said in a company memo on Thursday that the company expects to reduce its global workforce by about 3 percent. Reuters obtained a copy of the memo.
"With results today, we announced a $265 million severance charge taken at the end of 2013, which we expect will reduce AIG's global workforce by approximately 3 percent," he wrote.
AIG shares rose 1.7 percent to $50.42 percent in extended trading.
Benmosche said also said in the memo that while AIG has "positioned ourselves for continued growth and profitability," there is a need for more change, including "a culture where there is a clearer understanding of roles" and ensuring swift decision-making by the most qualified people.
"To accomplish this, in many parts of the organization, we will need to make some changes," he said.
"We know that this will mean some changes in roles and in reporting structure, and that some roles will have to be eliminated." Continued...