NEW YORK (Bloomberg) — American International Group Inc., the insurer bailed out by the US, shed 10,000 employees in the first half of the year by selling units and cutting jobs.

AIG employed about 106,000 people as of June 30, the US Government Accountability Office said in a report, about 8.6 percent less than the New York-based insurer's count in its 2008 annual report.

Mark Herr, an AIG spokesperson, wouldn't say how many people were fired, quit, or employed at operations the company sold.

AIG, once the world's largest insurers, is divesting units to repay loans included in the $182.5 billion government bailout. The company has agreed to sell assets including a US auto insurer, Japanese office tower and Canadian operations for about $9.8 billion in the past year.

AIG left its total employment unchanged in 2008.

"AIG is going to be a much smaller company," said Robert Haines, an analyst at CreditSights Inc. in New York. The rate at which the company sheds workers "will really be dependent on the timing of large asset sales."

AIG fell $2.60, or 5.4 percent, to $45.80 at 4:01 p.m. in New York Stock Exchange composite trading on speculation the company would issue new stock. The decline erased part of a 21 percent gain on Monday.