AIG Consumer Finance Unit Cuts Jobs As Losses Continue

August 14, 2009

American International Group Inc.’s money-losing consumer finance unit on Thursday said it eliminated 900 jobs and closed 145 branches in the first half of the year, and may make further cutbacks as it prepares to be sold.

In a regulatory filing, American General Finance Corp. said its quarterly loss increased sevenfold to $227.2 million from $31.8 million a year earlier, as revenue declined 32 percent.

American General has lost $467.8 million this year, after losing more than $1.3 billion in 2008. It has lost money for six straight quarters.

The job and branch cuts represent about 11 percent of the year-end totals that the Evansville, Indiana-based company had reported. American General said it ended 2008 with 7,900 employees and 1,374 offices, a separate filing shows.

“We may implement further measures to preserve our liquidity and capital, including additional on-balance sheet securitizations, portfolio sales, expense reductions, branch closures, and reductions in production,” the company said. It said it expects to have enough liquidity for at least a year.

An AIG spokeswoman said American General decided on the job cuts in May, and attributed them to the economic downturn.

AIG posted a second-quarter profit last week. The New York-based insurer is trying to sell assets to help repay the government, after accepting a series of federal bailouts totaling roughly $180 billion.

(Reporting by Jonathan Stempel and Lilla Zuill; editing by Gunna Dickson

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