A video of Vishal Garg, the CEO of mortgage firm Better.com, laying off around 900 members of staff in one fell swoop during a one way Zoom call has gone viral online.
Garg said that there were a number of factors behind the decision, and cited “the changing market, efficiency, performances and productivity” as a few reasons.
This is everything you need to know.
Who is Vishal Garg?
Garg is the CEO and founder of digital mortgage firm Better.com, which was launched in 2014.
He was born in India, and when he was seven years old he and his family moved to the US.
Garg studied finance and international business at New York University, and in 2000 he founded a private student loan company called MyRichUncle, alongside his high school friend Raza Khan.
By 2007, Garg had dropped out of NYU and MyRichUncle had become one of the biggest private student loan companies in the country. It would eventually be bought by Merrill Lynch and then again by Bank of America.
While Garg and Khan continued to work together to launch a new project, their partnership would become fraught by 2013. Khan filed a lawsuit against Garg claiming that he had not been filing the business’ taxes and that Garg had also transferred $3 million from the company to his personal bank account.
Garg hit back at Khan with an accusation claiming that Khan had stolen $400,000. During a deposition, Garg threatened to “staple [Khan] against a f**king wall and burn him alive”.
After launching Better.com, it quickly became one of the biggest fintech startups, however by the time 2019 came around, the company was plagued with allegations from employees about financial mismanagement.
In the past, Garg has also been criticised for his management style, after Forbes obtained an email that he sent to staff in 2020.
In the email, Garg wrote: “You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS… SO STOP IT. STOP IT. STOP IT RIGHT NOW.
“YOU ARE EMBARRASSING ME.”
What happened over Zoom?
On Wednesday (1 December), Garg informed 900 employees via a one way Zoom call that they had all lost their jobs.
In the call, which was recorded and has been shared online, Garg begins by saying: “I come to you with not great news. The market has changed, as you know, and we have to move with it in order to survive, so hopefully we can continue to thrive and deliver on our mission.
“This isn’t news that you’re going to want to hear, but ultimately it was my decision and I wanted you to hear it from me. It’s been a really, really challenging decision to make.
“This is the second time in my career that I’m doing this and I do not want to do this.
“The last time I did it, I cried. This time I hope to be stronger.”
He continues: “We are laying off about 15% of the company, for a number of reasons. The market, efficiency, and performances and productivity.
“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.”
The person recording the Zoom call can be heard saying “f**k you dude” and “are you f**king kidding me” when Garg reveals that everyone on the call has lost their jobs.
Garg goes on to say that US employees will be provided with “four weeks of severance” pay and “one month of full benefits”.
He ends the call by thanking everyone on the call of “each and every one of your contributions” and that he is sure that those who have lost their jobs will go on to be “more successful, fortunate and luckier” in their next endeavours.
What happened after the call?
According to Business Insider, Garg held a meeting with the remaining workers after the Zoom meeting had been concluded.
During the pandemic, Better.com had recruited large numbers of staff, something which Garg acknowledged and apologised for.
He reportedly told the remaining staff: “Today, we acknowledge that we overhired and hired the wrong people, and in doing that, we failed.
“I failed. I was not disciplined over the last 18 months.”
Garg also accused hundreds of the staff that had been laid off of “stealing” from their coworkers and customers by being unproductive, according to messages posted on an anonymous professional network, as seen by Fortune.
Garg wrote, under the username “uneducated”: “You guys know that at least 250 of the people terminated were working an average of two hours a day while clocking in eight hours plus a day in the payroll system?
“They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated.”
Talking to Fortune, Garg defended the post and confirmed that it was himself that wrote it.
He said: “I think they could have been phrased differently, but honestly the sentiment is there.”
What has Better.com said?
A spokesperson for Better.com clarified that the company had actually laid off 9% of its employees, not 15%.
On behalf of Better.com, Kevin Ryan said: “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.”
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