AOL Benefits Back After ‘Distressed Baby’ Outrage

Armstrong apologizes, but is that enough?

AOL has restored benefits that CEO Tim Armstrong initially said were cut in part because of the expense of “distressed babies” born to workers’ families. Still, the outrage over his remarks last week appears still high, and one of the mothers of those babies wrote an emotional column yesterday.

Last week, at a town hall forum for employees, Armstrong discussed recent cuts to 401K retirement plan benefits. He didn’t name employees but did mention two cases of families who had babies born with expensive medical conditions, and listed them among past expenses responsible for the current reductions.

Armstrong said these “distressed babies” cost $1 million each. People immediately jumped on the comments as insensitive, and even if Armstrong didn’t name the families, it wouldn’t be hard for co-workers to deduce which recent parents had troubled pregnancies or deliveries.

Even today, after the benefits were restored and apologies issued, some people are calling for Armstrong’s job. Sarah Lacy the editor of Pando Daily went on a “tweet-splosion.”

“Like, these are CEO BASICS. Don't single out employees as the reason you have to change a policy and don't vilify babies,” she tweeted.

Media sites like Valleywag criticized the “distressed babies” comment and presented charts showing Armstrong’s salary as measured in sick newborns. He makes about $12 million a year.

Yesterday, Deanna Fei, one of the AOL mothers, posted a column on Slate. Her husband is an editor at AOL, but she does not work there.

“Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012—felt the need to announce a cut in employee benefits on the very day that he touted the best quarterly earnings in years,” she wrote. “For me and my husband—who have been genuinely grateful for AOL’s benefits, which are actually quite generous—the hardest thing to bear has been the whiff of judgment in Armstrong's statement, as if we selfishly gobbled up an obscenely large slice of the collective healthcare pie.”

Even before the column, AOL announced a reversal in the benefit cuts. Armstrong apologized for his comments to employees in a memo Saturday. Armstrong has been criticized for months for past gaffes, as well. In August, on a public call with employees, the CEO fired an employee in a sudden outburst that was recorded.