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AOL 'Distressed Babies': CEO Apologizes for Comment on Benefits Changes

Image: AOL 'Distressed Babies': CEO Apologizes for Comment on Benefits Changes

By Morgan Chilson   |   Monday, 10 Feb 2014 03:44 PM

AOL’s leader Tim Armstrong has apologized for remarks he made about “distressed babies” causing financial issues for the company and backed off his company’s decision to cut employees’ 401(k) benefits.

In an emailed memo that went out to employees on Saturday, Armstrong said AOL would continue to match 401(k) contributions, CNN Money reported. He also responded to remarks he made about health insurance payments that had garnered extensive criticism.

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"The leadership team and I listened to your feedback over the last week. We heard you on this topic," the email said, according to CNN. “And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution.”

Armstrong also addressed the comments he made during a town hall meeting when he pointed to two cases of distressed babies that cost his company $1 million. It was those comments that garnered extensive criticism.

“On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific health care examples in trying to explain our decision-making process around our employee benefit programs," Armstrong said in the memo, Reuters reported.

In a CNN interview, Armstrong said he doesn’t have personal feelings about the Affordable Care Act.

“I have to deal with facts and reality, which is what does it do to our cost structure? And the fact is it’s one of the things that drove our costs up last year,” he told CNN, listing the ACA as one reason AOL leaders were changing benefits.

Deanna Fei, mother of one of the babies Armstrong cited as an example of increasing health care costs, wrote an article about the issue for Slate.

“I take issue with how he reduced my daughter to a 'distressed baby' who cost the company too much money. How he blamed the saving of her life for his decision to scale back employee benefits,” Fei wrote for Slate.

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