Tim Armstrong just keeps doin' the thing

http://www.slate.com/articles/double_x/doublex/2014/02/tim_armstrong_blames_distressed_babies_for_aol_benefit_cuts_he_s_talking.html

Last week, in announcing cuts to the AOL retirement plan, the CEO cited the increased costs of health care since two employees had "distressed babies" whose care cost a million dollars each. (A dubious estimate according to experts.) As a result, the man who pocketed $12 million last year -- and was basking in AOL's rally in earnings -- announced that because of those distressed babies, he was rolling back the 401k.

One of the mothers writes her response here, to the idea that she and her husband were hurting the company by using the insurance they were paying monthly premiums to secure.

Yes, we had a preemie in intensive care. This was certainly not our intention. While he’s at it, why not call out the women who got cancer? The parents of kids with asthma? These rank among the nation’s most expensive medical conditions. Would anyone dare to single out these people for simply availing themselves of their health benefits?

Then there is the matter of "How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting."

Armstrong was guilted into restoring the retirement plan.

He also is the clubhouse leader and a tough beat for Evil Corporate Bastard of 2014.

 

Well, that baby is just a fucking taker and Armstrong is a maker so clearly anything he said is correct. [sarcasm, just in case anyone was wondering]

 

A PR disaster, for sure. But unless I am mistaken, this was the crux of the short-lived benefit "cut":

Yes, employees who leave the company would get no match for that calendar year. And yes, existing employees would lose the advantage of "Dollar Cost Averaging" by getting a yearly payout instead of monthly payouts.

But is that it? Seriously? Those of us whose companies match $0 for anything we put in just aren't going to feel much sympathy for those who are only facing the horror of losing the advantage of Dollar Cost Averaging their company's matches. I'll gladly take a yearly, lump sum match of the 15% I contribute. I'll take any free money my company is willing to give me and not bitch about it.

 

It gives the company a strong incentive to lay off people 9-10 months from now, beyond what the company's normal incentive is. Cutting 300-500 employees at that point would save AOL millions of dollars.

Blaming a preemie baby for the company's woes, when the company is doing quite well and doesn't really have woes (earnings of 43 cents a share last quarter), is not just bad PR. It is a window into a deranged mind.

 

The problem wasn't necessarily the original benefit change. It was the bitter, childish and remarkably insensitive rant that sought to justify it. What, pray tell, if Armstrong's family suffers a similar financial catastrophe stemming from a health problem? Not wishing for it. Just amazed and disturbed at a culture of corporate greed that makes somebody think he can get away with such a diatribe.

 

Except the company already was giving the "free" money, and has now decided to take it away unless you still happen to be with the company by the end of the year. Not to mention, the company gets to collect whatever interest it can get on money that was once yours.

And as noted, this is being done by a company that just announced that it has been doing very well financially. It's one thing if a company is in deep shit financially and has to do it. AOL is doing it just to screw over its employees.

 

Why stop there? Why not agree to a lump-sum paycheck on Dec. 31? I mean, you can wait for your money, right? And with a lump-sum, you can avoid that pesky bi-weekly checking-to-make-sure-the-paycheck-deposited hassle! Win-win!

 

Cutting the matching entirely would save millions without a drop in the productivity that 300-500 layoffs would cause. A lot of companies have done that. I'm somewhat gratified when I see one hasn't.

Well, about 100 million Americans are happy to receive a lump sum payout averaging about $2,500 this spring for money they began earning 15 months previously. Woo-hoo! Tax refund!

My point was, on a list of ways companies can truly hurt employees, this ranks about No. 348 on the list.

 

As the parent of a child who faced a healthcare crisis, and on behalf of every parent who has faced a child's healthcare crisis, Tim Armstrong can go fuck himself.

 

I'm so glad I didn't go to work for Patch.

One of the best decisions I ever made.

 

Why would AOL want or need to hurt its employees, by taking away money they have earned, when it is making very good profits?

Taking Armstrong's assertion at face value (which doctors and others in the know about medical billing say is foolish), and assuming no other cost-cutting options are available in 2014, AOL would have a $2 million hole in its annual profit. That amounts to an earnings decline of roughly 2.5 cents per share on AOL's 78 million shares, which had an EPS of $1.12 in 2013. Is that a hole that needs to be plugged by altering retirement plans? Or by altering anything?

No, this falls squarely in the category of -- Q: Why did Tim Armstrong do this? A: Because he can. (Or thought he could.)