Tim Armstrong’s ill-considered comment about the reasons why his company’s health care costs are so high serves as a cautionary tale for anyone who might actually trust the management of corporate America.
The chief executive officer of AOL came under fire earlier this month after trying to explain to employees why their retirement benefits would be cut.
In 2012, Armstrong said, “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. And those are the things that add up into our benefits cost. So when we had the first decision about what benefits to cut because of the increased health care costs, we made the decision, and I made the decision to basically change the 401K plan.”
Of all the outrage expressed at Armstrong for blaming innocent infants for his fiscal management or lack thereof, the most poignant came from the mother of one of those “distressed babies.”
Deanna Fei, whose husband works for AOL, wrote a passionate, yet factual, critique of Armstrong’s comment that was posted Feb. 9 at Slate.com.
You see, one of those “distressed babies” is her daughter, who was born in October 2012.
The little girl came into the world by emergency Caesarian section and weighed only one pound, nine ounces when she was placed in an incubator in neonatal intensive care. She would spend three months there fighting for her life before her parents could finally take her home.
Of course, the bills range into the high-six figures, Fei says. But she doesn’t rail against Armstrong’s numbers. She rails against Armstrong’s numbness.
“I take issue with how he reduced my daughter to a ‘distressed baby’ who cost the company too much money,” Fei wrote. “How he blamed the saving of her life for his decision to scale back employee benefits. 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 is indicative of the mentality that likens laborers to mere office furniture, more computers, more desks, more chairs. Under business leaders such as Armstrong, who only sees employee benefits as a burden on his bottom line instead as an incentive to attract top-notch talent, the phrase “human resources” is nothing but a cruel joke.
You see, as agonizing as cutbacks, layoffs, furloughs and all the other financial hardships workers endure when budgets tighten are, the most humiliating, demeaning cut of all is the cut of being marginalized to less than human by so-called managers safely in the cocoons made possible by their six- and seven-figure salaries.
Armstrong made $12 million in 2012. And, as Fei pointed out, he chose to make his “distressed babies” comment and slash employee benefits “on the very day that he touted the best quarterly earnings in years.”
Perhaps it shouldn’t surprise us that a man who knows so little about the human condition would fail to see the irony in that.