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AOL blamed my 'distressed' baby for benefit cuts, mom says

Tim Armstrong, CEO and chairman of AOL
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The mother of one of two "distressed babies" cited by AOL chief executive Tim Armstrong as the chief reason behind a controversial plan to change some 401(k) benefits is speaking out, telling NBC Nightly News in her first television interview that the way the policy shift was announced was "completely dehumanizing."

"When I saw the headlines, it was sort of impossible to think he was talking about my daughter," Deanna Fei told NBC Nightly News. "It just seemed so completely dehumanizing. Also, a violation — for singling us out for using the health plan we paid for."

(Read more: AOL changing its 401(k) benefits due to Obamacare)

Fei — whose husband is an editor at the AOL-owned news company Huffington Post — wrote a harrowing first-person article for the online magazine Slate in which she recounted the painful birth of her daughter, and reprimands Armstrong for citing medical ordeals like hers as a reason for slashing employee benefits.

In the article, which was spreading like wildfire across social media channels Sunday, Fei wrote she objects to "how (Armstrong) exposed the most searing experience of our lives … for no other purpose than an absurd justification for corporate cost-cutting."

Armstrong on Saturday scuttled a plan to delay company contributions to employee retirement accounts and apologized for singling out skyrocketing costs associated with two births as the reason for the unpopular proposal.

(Read more: Squawking AOL andObamacare; why Twitter tanked)

"We heard you on this topic," Armstrong said in a letter to employees Saturday.

The cost-cutting move would have meant that employees receive matching 401(k) retirement contributions in one lump sum at the end of the year — instead of throughout the year. Workers who left the company before Dec. 31 would have received no contributions.

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But following employee backlash and public outcry, Armstrong announced the media company would return to depositing matched contributions every pay period over the course of the year.

He also said he was sorry for singling out the two mothers during a town hall meeting last week in which the policy shift was discussed.

"On a personal note, I made a mistake and I apologize for my comments last week," Armstrong said.