American International Group Inc. Chief Executive Officer Peter Hancock, who is shrinking the company while fighting off an activist investor, told staff that they can’t all count on lifetime employment with the insurer, according to people familiar with his remarks.
Hancock made the comments Tuesday in a town hall meeting that was broadcast to staff, said the people, who asked not to be identified discussing internal communication. Hancock said the expectation of shorter careers is a shift for AIG, and the insurer will still focus on professional development that will help staff succeed at other firms, said one of the people.
The CEO is under pressure to cut costs after posting a third-quarter loss Monday. Activist investor Carl Icahn has said the company is poorly run and should be split into three insurers, a proposal that Hancock rebuffed Tuesday when speaking in a public conference call. The CEO told analysts and investors that the company plans to dismiss almost a quarter of the top 1,400 members of senior management.
“These are leaders that have contributed hugely,” Hancock said on the call. “We just simply need fewer cooks in the kitchen.”
The town hall remarks were discouraging to a swath of workers, the people said. Jon Diat, a spokesman for the company, declined to comment.
AIG had about 65,000 employees as of Dec. 31, compared with 116,000 six years earlier. The insurer has been selling assets for years, first to repay a government bailout, and then to simplify the company. AIG has also consolidated offices and moved jobs to lower-cost locations such as the Philippines, Malaysia and Amarillo, Texas.
Hancock’s address to employees echoes a presentation made by his predecessor, Robert Benmosche, in 2013. Benmosche warned some staff that year against buying New York-area homes.
–With assistance from Katherine Chiglinsky in New York and Noah Buhayar in Seattle.