Cutting Benefits Because of ‘Distressed Babies’

Yesterday AOL CEO Tim Armstrong told employees during a company-wide conference call that AOL would be scaling back its 401(k) program and employer match. According to Joe Pompeo at Capital New York, Armstrong explained:

“Two things that happened in 2012,” he said, according to a transcript provided by an AOL employee. “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”

For at least some employees, Armstrong’s effort to show how much care the company takes for the health and wellbeing of its staff failed to land. Though he did not name the employees he referred to, “people were just shocked that two particular women would be singled out on a company-wide call,” a person who was on the call told Capital.

The singling out of the two women who “had distressed babies” was immediately picked up by other media outlets. There are legitimate reasons for why a company would need to scale back benefits — AOL has been struggling and recently unloaded it’s money-losing local news service. But singling out employees for things they have no control over? Terrible.

After his remarks hit the news cycle, Armstrong followed up with his employees to try to clarify his statement:

As we discussed at the town hall, we care about you and the company — a lot. This morning, I discussed the increases we and many other companies are seeing in healthcare costs. In that context, I mentioned high-risk pregnancy as just one of many examples of how our company supports families when they are in need. We will continue supporting members of the AOL family.

See also: Mother fired from her job at Whole Foods for staying at home with her special needs son when schools were closed due to freezing weather.

Photo: Kai Hendry

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.