UPDATE: AOL has reversed its decision and publicly apologized.
“The leadership team and I listened to your feedback over the last week,” wrote Armstrong in his e-mail to the company, the paper reports. “We heard you on this topic. 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.”
AOL recently announced that it was cutting employee benefits and gave Obamacare as the reason for the move.
Internet giant AOL, one of the nation’s earliest Internet companies, announced a change in how the company pays out contributions to 401k plans in an effort to reduce spending.
Instead of matching employee contributions to the retirement savings plan on a monthly basis, going forward AOL will pay out a single, annual, lump-sum payment at the end of the year. This means that any employee who leaves the company before that lump-sum payout is applied will not get the matching payment.
Explaining the change, Chief Executive Officer Tim Armstrong said, “Obamacare is an additional $7.1 million expense for us as a company. We have to decide whether to pass that expense to employees or cut other benefits.”
AOL owns the websites Huffington Post and AOLNews and still hosts millions of email accounts.
CEO Armstrong also got himself in a spot of trouble over the announcement with a comment he made that was meant to show how AOL does right by its employees.
“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 when he announced the 401k changes.
Critics jumped on the “distressed babies” comment, claiming it was insensitive language.