AOL CEO Tim Armstrong Under Fire For ‘Distressed Babies’ Comment During Conference Call

AOL CEO Tim Armstrong Under Fire For 'Distressed Babies' Comment During Conference Call

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The AOL CEO is in hot water with employees on Thursday after making comments that blamed “distressed babies” for changes in the company's 401(k) program

AOL CEO Tim Armstrong came under fire by outraged employees after he singled out the sick babies of two women at the company for increasing the cost of health benefits. Armstrong explained that the sick babies forced AOL to dole out millions in medical expenses on a company-wide conference call. Armstrong's controversial comments followed his explanation on CNBC why he was making changes to the company's 401(k) program.

“As a CEO and as a management team, we had to decide, do we pass the $7.1 million of Obamacare costs to our employees?” Armstrong said “Or do we try to eat as much of that as possible and cut other benefits?”

Also read: AOL CEO Tim Armstrong Fires Patch's Abel Lenz On A Conference Call (Audio)

“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,” Armstrong said on the call. “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.”

According to a report by Re/code's Kara Swisher, Armstrong's baby bashing did not go over well with many AOL employees:

“His comments during the earnings call, specifically blaming the policy change in part on the costs associated with the birth of two ‘distressed’ babies by AOL employees, were completely outrageous. Almost unbelievable.”

Armstrong blasted out a company-wide memo after his comments went viral:

AOLers -

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.

We provide a wide range of benefits – including our 401k plan – and conduct open information sessions each Fall on all available benefits as well as any changes being made. We will continue to do that.

The spirit of the town hall and the spirit of how we choose benefits are the same – we want to be open and transparent about the choices we make and why we are making them.

As I have said over and over again, our employees are our greatest asset. Let’s move forward together as a team. – TA

Watch Armstrong explain changes in the company's 401(k) program on  CNBC:

  • RandomComment

    I don't think Tim wants to discuss how much his “distressed baby” cost AOL. $200m blown for Patch.

    Good work, Tim.

  • Newzheimer

    Hey, Tim. If you really, really care about your employees, rather than bitching and whining about ‘distressed babies’ how about you take a slight salary cut? I think I read someplace you make something like $12.1m in annual comp. That pays for a lot of ‘Obamacare', as you put it.

  • Benjamin Roussey

    It is called “personal
    responsibility”. We know liberals hate those two words when they are together
    because they do not want to take responsibility for their actions. It is not
    rich people’s fault you or your kids dropped out of high school. It is not rich
    people’s fault that they decided to study in high school and had the guts to
    start their own business and work at it until they had a winning product and/or
    service. It is not rich people’s fault that you chose to have a child out of wedlock
    and not listen to good advice when it was being handed to you. Most rich people
    were not born rich, they worked hard and did not spend all their spare time
    watching MTV or waiting for something to happen. They made it happen and they
    employ millions of Americans in jobs that matter. Your government job does not
    matter, most likely. And union members kill jobs but that is another story. It
    is about personal responsibility which liberals do not want to acknowledge
    because then they would have to realize their failure and stagnant professional
    is their fault and on one else’s.

    • eekonomist

      What would Jeebus do?

      • Benjamin Roussey

        Tell people that if they can work, work.

        • Benjamin Roussey

          Liberals also are soft on crime, therefore we have child
          molesters in our neighborhoods praying on our children. They put gangsters and
          rapists back on our streets because they are too pathetic to do what is
          necessary. Soft on crime, soft on terrorism and our enemies (see North Korea,
          Iran, Syria, Russia; sorry Osama in Ladin is small time compared to the threats
          we face and what else has been going on).

      • Benjamin Roussey

        It is called “personal
        responsibility”. We know liberals hate those two words when they are together
        because they do not want to take responsibility for their actions. It is not
        rich people’s fault you or your kids dropped out of high school. It is not rich
        people’s fault that they decided to study in high school and had the guts to
        start their own business and work at it until they had a winning product and/or
        service. It is not rich people’s fault that you chose to have a child out of wedlock
        and not listen to good advice when it was being handed to you. Most rich people
        were not born rich, they worked hard and did not spend all their spare time
        watching MTV or waiting for something to happen. They made it happen and they
        employ millions of Americans in jobs that matter. Your government job does not
        matter, most likely. And union members kill jobs but that is another story. It
        is about personal responsibility which liberals do not want to acknowledge
        because then they would have to realize their failure and stagnant professional
        is their fault and on one else’s.

        • Benjamin Roussey

          1993
          – WTC Bombing – 50,000 people would have died because of no escape from the
          stairwell (18 people actually died) ; 2 African embassy bombings around 96/97 –
          many people died, mainly Africans ; USS Cole attack in 2000 – Clinton did
          nothing about any of this accept fire tomahawks from 800 miles out (that is all
          he would ever do) – several sailors dead. Al Queda was emboldened because of
          Clinton’s weak responses – this led to 9-11 and Bush hammered them unlike Al
          Gore would have ever done.

  • Benjamin Roussey

    You have to be careful what you say.

  • Benjamin Roussey

    Romney created more jobs in his lifetime than Obama ever has
    and ever will. Creating federal jobs, that are useless, and soak up more money
    from the private sector does not count. Any president can create federal jobs.
    How about private sector jobs that count? That is what matters. Romney at Bane
    Capital did more for America than Obama ever has and ever will in the private
    sector job count. It is not Obama’s fault though that he does not understand
    business, he was raised by a socialist mother who was obviously clueless
    herself.