Is AIG really "too big to fail"?

AIG in 2008, received a 2 year loan from the federal government of $58 billion dollars to prevent them from going under. In the Federal Reserve Act the feds are granted the legal authority to lend to non-banks under unusual circumstances. Following this loan, AIG was criticized as "too big to fail". This is a company that is so essential to the global economy that it's failure would be catastrophic.

In 2014, AIG laid off 3% of its workforce which was equivalently 1,900 jobs. A month after, many of the department heads of AIG were granted major bonuses on top of their yearly salaries following their announcement of layoffs in 2014. CEO of AIG, Robert Benmosche, alone received a $6 million dollar bonus on top of his $2 million dollar base salary. Though this sounds ridiculous, in typical cooperate companies like AIG this occurrence isn't as uncommon as you would think. 

On January 7th, 2016, My dad, who is one of these employees, thought he was walking into the typical beginning of the year conference where they would discuss the changes that were to come in 2016. No one was expecting a change this big. Not even my dad's Regional President knew what was to come today. My dad and hundreds of other AIG Financial Network employees packed into an auditorium in Birmingham and were meet with an automated message stating that thousands of AIG Financial Network employees' jobs were terminated effective immediately and offered a severance. These layoffs excluded the offices in Baltimore, San Diego, and San Francisco because they deal with the Asian markets. Only the financial side of AIG was cut. The cooperate insurance survived. AIG has not folded completely. 

My dad has been offered a job by Trans America along with the majority of his recently laid off co-workers. AIG sales reps from the Huntsville, Birmingham, and Tuscaloosa office are to go to a conference Birmingham tomorrow to hear what Trans America has to say. It seems their mission is to try and hire every recently laid off AIG worker they possibly can. 

Just yesterday on January 6th, 2016 it is speculated that AIG invested nearly $4 million dollars in a start up company. The exact amount of investment won't be released until tomorrow. HCS, a technology invention research organization and lab, states that the devise will incorporate wearable devices, artificial intelligence, building information modeling, and cloud computing. This product is designed for companies that have the highest risk for workers including those involved in manufacturing, warehousing, and construction. The executive Vice President and CEO of Commercial of AIG, Robert S. Schimek, stated that "this devise would make their work sites safer places for their employees and help reduce our clients overall cost of risk".

The stockholders of AIG want to see a profit in the company that makes their shares worth more money. Cutting the AIG Financial Network side of the company, on paper, will make it look more profitable by the money they're saving by not having to pay for those workers' paychecks, their work space, and other company expenses. This will for now make the stockholders happy. AIG Financial Network is still around to have independent insurance salesmen sell their products, but they aren't employees of just them. Independent salesmen, unlike workers who just sell under the umbrella of AIG Financial Network aren't going out and advocating the purchase of just their products. So isn't it likely that AIG Financial Network won't be able to continue to keep up these "profitable looking" numbers since they won't be able to grow at the rate they would with employees?

So if AIG is too big to fail, it might have been a bad idea to make things look better in the short term rather than looking at the big picture...and if the CEO of AIG knew he was going to be laying off thousands of employees maybe he shouldn't have given himself a $6 MILLION dollar bonus?