Better.com’s controversial CEO Vishal Garg, 43, apologized after facing rampant criticism for laying off 900 employees over a Zoom call last week
Following widespread criticism of Better.com for firing 900 people during the Zoom call, its CEO issued an apology.
Vishal Garg addressed a letter to employees, which was later published on the company website. It stated that he wanted to apologize for how he handled the layoffs.
I failed to show respect and appreciation for those who were affected as well as their contributions towards Better.
“I took the decision to make the layoffs. However, I made a mistake in how I communicated it. In doing so, I embarrassed you,” he said.
Garg, 43 years old, told nine percent employees of the company that they were going to lose their jobs. Then, in a blog, Garg attacked them as ‘lazy’ for stealing customers.
He was humbled when three of his most senior executives resigned in the aftermath of mass-firing. There are also claims that other top executives may be on their way to resign.
The letter concluded that he was deeply sorry for the manner he had communicated his news. This is a deeply regrettable situation.
Better relies on your expertise, commitment, and focus to make homeownership a reality for all of our clients across the country.
‘I couldn’t be more grateful for all you are accomplishing for the customers we serve. At our All Hands meeting, we will discuss what the year holds. I hope you’ll join me for the discussion.’
“We’re also making quick steps to ensure that we’re very transparent about our goals and are aligned with our company’s metrics. We’re looking at how we can work together to better serve our customers.
It concluded with “I believe” in the recipient, “I believe” in Better and “I believe we can improve homeownership together,”
Vishal Garg wrote a note on Better.com, stating that he was sorry for how he handled layoffs. I failed to show respect and appreciation to the people who were affected, and their contributions to Better.
Garg was able to get rid of the entire company’s diversity, equity and inclusion team. This group deals with racism and sexism at work and has since been voluntarily dismissed by three executives.
The head of public relations, Tanya Gillogley; head of marketing, Melanie Hahn; and vice president of communications, Patrick Lenihan have all handed in their resignations, according to Insider.
A source said that this was the first wave in resignations for The Daily Beast. The company is expecting more.
Garg (43), threw out the entire Diversity, Equity and Inclusion team of the company, which handles complaints regarding racism and sexism at work.
In his three-minute call, Garg told them bluntly: ‘This isn’t news that you’re going to want to hear. This call is for you if you don’t want to be part of the unfortunate group being laid off. This is the final day of your employment.
According to him, the market has changed and drastic cuts were necessary to save the company’s $7 billion workforce.
After the December 1 Zoom Call, Patrick Lenihan was also removed as vice president for communications.
Tanya Gillogley (left), the head of PR, and marketing chief Melanie Hahn (right) quit following the December 1 firings
Despite receiving a cash infusion of $750 million last week, the firings took place.
According to the boss, market efficiency, productivity, and performance were also to blame. He added that the company had to move in order to survive.
Later, he apologized via email to employees for not showing the proper amount of appreciation and respect to individuals affected and their contributions to Better.
He said, “I made the decision to layoff, but I communicated it incorrectly.” You are now embarrassed.
“I am sorry for the difficult way that I have communicated this information.
“I deeply regret the circumstances and will learn from them and do my best to make it right.
After the meeting, participants on the call discovered that the computers in their companies had started to go down.
One angry worker filmed the call and shared it online, complete with a moment where they cursed at the CEO as he confirmed the mass ‘termination’ of employees from the Manhattan-headquartered mortgage provider.
The unidentified male worker could be heard to say: ‘F**k you dude. Are you f**king kidding me?’
Garg was accused by his workers of being “erratic”, but he later doubled down in a blog post that saw him criticize his employees for their’stealing’ via laziness.
Father-of-three posted on professional network Blind that 250 terminated employees worked an average of two hours per day, while working 8+ hours in the payroll system.
“They stole from you, and they robbed from our customers who pay the bill that pays our bills,” he said. “Get educated,” he said.
Fortune interviewed Garg who threatened to strangle a former business partner to the wall and kill him, according court documents. He also confirmed that he made these comments using the anonymous username “uneducated”, but refused to relent.
He said, “I believe they could be phrased differently but the sentiment is there.”
You won’t want to know this news. Garg suddenly announced that everyone on the call was being fired. Your employment is ended immediately.
He described earlier in his Zoom conversation how difficult it was to let go of staff members and how much he wished he wouldn’t cry like he did in the past.
He said, “This marks the second time I have done this in my professional career. I don’t want to stop doing it.”
“The last time that I tried it was when I wept.
“This time I want to be more powerful.
‘We are laying off about 15% of the company for a number of reasons — the market, efficiency and performances and productivity,’ he told workers.
Later, a firm spokesperson corrected the figure of the boss and stated that 9 percent was the true percentage of employees who were laid off.
Garg told Fortune that four weeks ago the firm started reviewing employee productivity data, including missed telephone call rates, number of inbound and outbound calls, employees showing up late to meetings with a customer, and other metrics.
He stated that ‘As our hiring pace slowed down, we noticed some worrying statistics, and many of our customers weren’t receiving the services they were entitled to from our colleagues.
Garg was further discredited by news reports that Garg had accused the CEO of stealing and being inefficient by accusing workers of working for two hours a day and clocking eight+.
Staff were surprised by Garg’s actions and criticised him for holding another “threatening” companywide conference after announcements of the layoffs. He said that the remaining employees’ performance would be carefully monitored.
Fortune reported that one employee said, “His tone was extremely severe and threatening.”
Garg also warned that next year will be a bloodbath, according to two other witnesses.
One source said, “It was very odd.” “The comments were alarming.”
Fortune reported that Garg did not threaten employees and that there was no extra monitoring beyond what is required by regulators.
He did however admit that the company was more interested in productivity data.
He claimed that his “bloodbath” reference was out of context. It was more about the mortgage market.
Better, which offers pre-approval on a mortgage in minutes, saw its share price soar during the pandemic as the saturated home buying market, coupled with low interest rates, saw thousands of new customers looking for fast ways to get a loan.
The Information reports that the company has increased its workforce by 2,000 since Covid was founded and had a target of generating $800 millions in revenue for this year.
Even with the layoffs, it has still 9,000 employees in the US and India.
Fortune quoted Garg as saying that investors and members of the firm were supportive of job cuts. Garg refused to identify the board members and investors who offered support.
According to two former employees, and one ex-aide, Garg is well-known for his erratic behavior in the company’s Slack messaging system.
In one Slack message, he stated that “if you’re not interested in hard work,” he said.
According to some reports, the CEO demands high standards from his employees down to the most minute details.
Managers of offices were criticised for not keeping mini refrigerators stocked with Perrier or Fiji water.
Garg also insisted on bottles of Gerolsteiner, his sparkling beverage of choice, according to Forbes.
“Why are we having biscotti like that?” He used to demand that office managers make biscotti in such a way from him.
Forbes received one email in which he wrote the following: You are too slow. Your brain is a collection of DUMB DOLPHINS… STOP IT. STOP IT. Stop IT RIGHT NOW. I’M EMBARRASSED by YOU.
Better’s headquarters is 44,000 square feet of office space on the 59th floor of 3 World Trade Center in Manhattan
In August, The Daily Beast reported that one of his closest executives, Elana Knoller received stocks worth potentially tens to millions of dollars and $8,000 per months for two homes, as well as other perks.
Knoller was finally placed on administrative leaves for bullying.
The Daily Beast also reported that Garg told a former business partner that he was ‘going to staple him against a f**king wall and burn him alive.’
Better was featured in Forbes Fintech Top 50. It hopes to become public before the year ends.
The company received $1.5 billion of convertible notes and debt earlier in the week before its planned debut.
Softbank backed Better has received a $750m cash injection last week. This comes after it announced in May that it would go public as a Special Purpose Acquisition Company. It now stands at $7.7B.
Garg, who was born in India, moved to Queens as a seven-year-old and attended Manhattan’s renowned Stuyvesant High School.
His early entrepreneurial mindset was evident when he bought CliffsNotes books and CliffsNotes, which he then sold to other students at a profit.
Garg stated that he thought his superpower was math. He also said that he could spot opportunities. This is what Garg shared in a podcast in 2019.
A teenage business venture involved buying clothing in thrift shops and selling it on eBay for more.
A Better spokesperson later said that this wasn’t true, as eBay was founded after Garg graduated from school.
He went on to study at New York University where he would meet his future business partner Raza Khan.
MyRichUncle was founded by them in 2000 as an online provider of student loans.
In 2007, it was publicly traded and had more than 300 million loans under its belt. It started out with only $30,000 in capital.
In 2007, the financial crisis led to the liquidation of the company.
Khan and Garg were inspired by the subprime mortgage crash to explore a new market for lending.
Based on the algorithms they developed at MyRichUncle and establishing a company called EIFC to identify toxic mortgages,
This tool was created to assist investors in identifying mortgages that were not properly issued. Investors can sue banks for selling bad loans.
Khan said that although the initial signs looked promising, Forbes noticed some inconsistencies regarding the finances.
He sued Garg in 2013, alleging that Garg’s tax returns were not properly filed, and that Garg moved $3,000,000 to his personal bank account.
They have been in an ongoing legal battle since then.
According to court documents, during one hearing in December 2019, Garg turned to Khan and said that he was ‘going to staple him against a f***ing wall and burn him alive.’
Garg later apologised during the deposition because he let his ’emotions out of control’
Forbes 2020, A Better spokesperson stated that law suits are a common occurrence for CEOs of successful startups.
Khan was named by him as an ex-friend and former business associate who is a litigious.
Better’s story is a more optimistic one.
Forbes reported Garg’s story about how his wife and he rented their house while she was pregnant.
He said that ‘we lost a place we wanted to purchase to an all cash buyer because our mortgage process had been so slow and inefficient’.
Garg created Better in 2014, with the idea to speed up the process. Better allows you to pre-approve your mobile phone’s purchase in just 3 minutes.
The traditional fees owed by borrowers would be eliminated, which makes it more affordable for consumers.
Better will sell mortgages once they are issued to lenders such as Fannie Mae, Freddie Mac, and Wells Fargo.
This concept is proving to be hugely popular, possibly more than it was during the recent pandemic when millennials tried to climb the ladder of property while also saving thousands by working remotely.