The Financial Times reported on Wednesday that AIG will cut 1,500 jobs at the same time as its profits beat expectations

The article, reminding readers that American International Group is the US insurance company that was bailed out during the financial crisis, said the massive organisation is cutting about three percent of its global workforce.

The job cuts come as AIG reported 2012 insurance operating earnings of more than $10 billion, along with fourth quarter net income of $2 billion and diluted earnings per share of $1.34

Among the highlights pointed to by the company were:

• Fourth quarter 2013 after-tax operating income attributable to AIG of $1.7 billion; after-tax operating income per diluted share attributable to AIG of $1.15

• Along with full year 2013 pre-tax insurance operating earnings exceeding $10 billion, growth in all core insurance operations

• A 25 percent increase in AIG’s quarterly dividend to $0.125 per share; and authorisation for the repurchase of additional shares of AIG common stock, with an aggregate purchase price of up to $1.0 billion, resulting in an aggregate remaining repurchase authorisation of approximately $1.4 billion

The Financial Times story stated: “The company said on Thursday it had taken a $265 million severance charge at the end of 2013 to cover job cuts primarily in AIG’s property casualty unit, one of the company’s main divisions which covers homes, cars, and businesses. The cuts amount to about 1,500 people, a person familiar with the company said. “The insurance group has slowly recovered from its near-collapse in 2008, paying back almost $200 billion in bailout funds to the US Treasury and Federal Reserve.

“It has recorded a profit in seven of the last eight quarters as it divests non-core businesses and reduces expenses.”

Quoting chief executive Robert Benmosche, who wrote in a memo to staff that was obtained by the Financial Times: “Ultimately, we know that simplifying AIG will help you work more effectively, be more empowered to make decisions, and to be more informed.”

Profits at the insurer were $2 billion in the final three months of last year, while last year the company saw a loss of $4 billion in the same quarter, when it was hit by losses related to superstorm Sandy.

The London financial newspaper reported that the company’s $1 billion operating profit before tax at its property casualty division in the fourth quarter compared with a loss of $944 million in the same quarter a year earlier. In the life and retirement part of the business, operating profit before tax increased to $1.4 billion from $1 billion.

Shares in the company rose on Wednesday by one percent in after-hours trading in New York.

The Financial Times stated: “The insurer ... is returning to its core businesses under Mr Benmosche.

“Asset sales made as part of its strategy to return to health have left AIG roughly half the size that it was before the crisis.

Late last year it agreed to sell its aeroplane leasing business to AerCap, a Dutch company, for $5.4 billion.

“AIG added on Thursday that it would buy back $1 billion of shares and raised its quarterly dividend 25 percent to 12.5 cents a share. The company completed its first share buy-back since the bailout in the third quarter of last year.

At press time it was not known if the cuts would effect their Richmond Road office in Bermuda.