Whatever you do ladies, don’t have your babies while working at AOL. CEO Tim Armstrong recently cut retirement benefits from his employees and blamed it on two workers who had difficult births!
Armstrong found himself in hot water after he shared the reason behind the 401(k)cuts during a company conference call. The first reason: Obamacare. The second: the two unidentified women who had “distressed babies” in 2012.
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“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, according to the Capital New York. “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.”
I can’t image how the employees felt to hear their boss blame cuts on difficult pregnancies and newborn children. According to reports, workers at the Huffington Post parent comfy didn’t take to the news too well.
After the town hall meeting, Armstrong tried to clear up his words in a memo sent to AOL’s 5,000 employees.
“I discussed the increases we and many other companies are seeing in healthcare costs,” he wrote. “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.”
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Check out a breakdown of the new policy by Bloomberg Businessweek, below. Then tell us your thoughts on this mess in the comment section.
Workers who aren’t on the payroll at year’s end will forfeit AOL’s 3 percent matching contribution to the accounts. IBM (IBM) made a similar change in 2012. If you plan to quit, management thinking goes, forget about collecting our share of your retirement savings.
Many employees didn’t react well to either bit of news, according to news reports. First, there’s the financial blow to workers, who will lose 401(k) funds if they leave AOL, as well as miss the opportunity to have the company’s match bolster their financial returns over a full year.
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