CEO of a digital mortgage company has fired 15% of the company’s workforce over Zoom call leaving its 900 employees in shock.
Vishal Garg, 43, chief executive officer of the online mortgage lender Better.com which has been founded in 2015, has started a three-minute Zoom call to inform his employees that they were fired.
On the said Zoom meeting, Garg told the workers: “I come to you with not great news. We are laying off about 15 percent of the company for a number of reasons — the market efficiency and performances, and productivity.”
He continued: “This isn’t news that you’re going to want to hear… if you’re on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately.”
“This is the second time in my career I’m doing this, and I do not want to do this. The last time I did it I cried. Um, this time, I hope to be stronger,” he added.
He told the hundreds of former employees that they would get about a month’s pay and three months of benefits, all of which would be detailed in an email sent to their personal email addresses from human resources.
Insider reported that Garg addressed the rest of the company’s employees shortly after the lay-offs were announced, saying, “We should have done this three months ago.”
Yet what Garg failed to tell the staff was that just a week prior, Better.com had received $750 million in investments from Softbank, the Japanese firm and key investor as it prepared to go public, with CNN reporting that the company is currently valued at over 1 billion dollars.
Kevin Ryan, the Company chief finance officer, told BBC: “Having to conduct layoffs is gut-wrenching, especially this time of year. However, a fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market.”
In a blog post following backlash over the call, Garg defended his actions by firing back at his employees saying: “You guys know that at least 250 of the people who were terminated were working an average of 2 hours a day while clocking 8 hours+ a day in the payroll system? They were stealing from you and stealing from our customers who pay the bills that pay our bills.point 438 |
Get educated”.point 19 | 1
Ann Franke, Chief executive of the UK’S Chartered Management Institute, criticized how the staff was fired, on the BBC program, she stated that “Bad managers will fire people badly whether virtually or in person.”
“But the insensitive manner in which this was conducted was just magnified by the fact that it was done in the sort of virtual and quite insensitive style. What we know in the pandemic is that empathy matters,” she added.
After Better.com received blowback online, Garg attempted to apologize for his remarks saying: “I am deeply sorry and am committed to learning from this situation and doing more to be the leader that you expect me to be. We will talk more at our upcoming All Hands meeting about what to expect for the year ahead. I hope you’ll join me for the discussion.”
He continued: “I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better. I own the decision to do the layoffs, but in communicating it I blundered the execution. In doing so, I embarrassed you.”
“I want to apologize for the way I handled the layoffs last week. I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better,” he added.
Business Insider reported that after firing 900 staff, Mr. Garg held a subsequent “town hall” meeting with remaining workers. Better.com had recruited high numbers of staff during the pandemic.
But Mr. Garg reportedly told his staff: “Today, we acknowledge that we over-hired and hired the wrong people, and in doing that, we failed. I failed. I was not disciplined over the last 18 months.”
Mr. Garg’s management style has also been criticized in another email obtained by Forbes last year, where he wrote: “You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and … DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME.”
Better.com became a pandemic darling as city dwellers sought to flee to greener and larger spaces in the suburbs, fuelling a boom in the housing market and associated lenders.
Better.com which aims to use technology to make the house buying process “faster and more efficient” announced in May that it plans to go public through a SPAC, or special-purpose acquisition company, at a $7.7 billion valuation.