LEAKED MEMO: AOL CEO Tries To Explain Why He Blamed Pay Cut On Sick Babies

AOL is changing the way it matches employee contributions to their 4o1(k)s. Instead of contributing through the year, AOL will now contribute a lump sum at the end of the year.

This upset employees, who describe the move as a pay cut.

This morning, AOL CEO Tim Armstrong got on a conference call to explain the move. He said that AOL healthcare costs were up and that the company had to figure out how to pay for them somehow.

In an attempt to describe how expensive employee healthcare can be, Armstrong said that in 2012 AOL paid $2 million to keep alive two "distressed" babies born from AOL employees.

This explanation angered lots of AOL employees.

So Armstrong just sent out this memo:

AOLers -

As we discussed at the town hall, we care about you and the company - a lot. This morning, I discussed the increases we and many other companies are seeing in healthcare costs. 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.

We provide a wide range of benefits - including our 401k plan - and conduct open information sessions each Fall on all available benefits as well as any changes being made. We will continue to do that.

The spirit of the town hall and the spirit of how we choose benefits are the same - we want to be open and transparent about the choices we make and why we are making them.

As I have said over and over again, our employees are our greatest asset. Let's move forward together as a team. - TA

This memo isn't much of an explanation for the comments. The real explanation is that sometimes Tim Armstrong likes to speak off the cuff. And sometimes it has awkward results.