AOL is facing the fact that its CEO has a PR image that makes Genghis Khan look like a wet liberal.
Tim Armstrong has to make many unpopular decisions if he is going to turn the outfit around however he is not the sort of person who appears to be good at getting employees to follow him by rallying around his ideas.
Recently Armstrong tried to save his company cash by cutting its pension contributions. While that is never going to be popular, he managed to turn it into a PR disaster by trying to blame two employees’ “distressed babies” because AOL had to pay a million dollars in benefits.
Armstrong singled out two unidentified employees who had babies with health problems in 2012 and their impact on AOL health costs, which he said had also increased because of “Obamacare” health reforms, which he said added $7.1 million in expenses to the company.
So, in other words, not only was he going to make employees suffer, he was going to beat up on two employees with sick kids and try and use a GOP “talking points” document to blame the president for being the bastard who cut AOL pensions.
Like many terminally wealthy people in the US, Armstrong clearly did not understand those who were poorer than him, nor why these people might be upset that their pensions are being cut with such a blatantly stupid bit of spin.
His use of the term “distressed babies” also implied that he had to cut pensions because of the heathcare costs of two babies with a touch of the snuffles was never going to fly. All it took was some hack to find one of the babies, which happened over the weekend. Of course writer Deanna Fei did not have far to look to find the mother — it was her. Her husband was an AOL editor.
Someone who is more of a “people person” might have considered that before he decided to leak confidential information on two staff members and blame them for the cutting of pensions, he might like to check that one of them was not going to go public and talk to the press. Since AOL is a media organisation, the chances of one of the people he was slagging off being a journalist was high so again Armstrong made another cock-up.
Sure enough, writing in Slate, Fei managed to show Armstrong in an extremely poor light. She said that her baby was not just “distressed” it was disabled and nearly died during childbirth.
“She weighed 1 pound, 9 ounces. Her skin was reddish-purple, bloody and bruised all over. One doctor, visibly shaken, described it as “gelatinous”. I couldn’t hold my daughter or nurse her or hear her cries, which were silenced by the ventilator. Without it, she couldn’t breathe,” the mother explained.
She had a one third chance of dying before the parents could bring her home. She might not survive one month or one week or one day. She also had at least a one third chance of being severely disabled, unable to lead an independent life.
“Our daughter has already overcome more setbacks than most of us have endured in the span of our lives. Having her very existence used as a scapegoat for cutting corporate benefits was one indignity too many,” Fei wrote.
It was the second time that Armstrong found himself on the defensive after making spontaneous comments during company meetings. In August, Armstrong issued an apology after publicly firing a Patch creative director in front of a thousand employees.
Of course, AOL would never dream of firing Armstrong for making Scrooge look like a nice bloke. His comments came on the same day that the company reported better-than-expected results and its best year of growth in a decade. AOL reported $36 million in net income during the fourth quarter on $679 million in revenue.
So while he is making money for his shareholders and of course getting huge bonuses for himself, why should the board think he is doing anything wrong?