Garg claimed that workers were taking time away and not meeting deadlines at the layoff meeting. But he retracted his statement in an email days later.
Former and current employees claim that the CEO at Better.com wanted to pay the 900 workers he dismissed in a Zoom call of three minutes earlier this month.
Vishal Garg (43), told 9 percent of employees that they would be losing their jobs during the Zoom call on December 1. He later wrote a blog post attacking them for being so ‘lazy’ they effectively ‘stole’ from customers.
Garg is on leave while the board of directors examines mass firings. He allegedly suggested that workers fired without prior notice would be paid one to two weeks of pay. Business Insider reports Garg has been placed on leave.
Insider reported that some senior executives balked at the low payout in a dozen meetings before the mass layoff. Garg encouraged them to increase the financial buffer to two or 10 weeks. Others on the management team left the meeting with complete dismay.
The company eventually relented and paid workers 60 days of pay. They had been laid off three weeks prior to Christmas.
You won’t want to know this news. Garg suddenly announced that the call was for the “unlucky” group. “Your employment here has been terminated immediately.”
Better.com released the following statement to DailyMail.com: “In total, Better provided departing workers benefits including: a total 60 days’ pay; additional recruitment resources to help secure their next jobs; and, to whatever extent possible and based upon each employee’s personal circumstances, Better will no longer be enforcing any non-compete provisions.”
On December 1, Garg invited 900 workers to the Zoom call only to tell them: ‘If you’re on this call, you are part of the unlucky group that is being laid off.’
Garg disposed of all members of diversity, equity, and inclusion, the team that deals with workplace racism and sexism complaints.
He continued to critique their work and accused them of taking time away from deadlines.
“You will only be permitted to fail once.” You will be encouraged to only fail once. He said that it was unacceptable to miss deadlines.
According to him, the market has changed and drastic cuts were necessary to save the company’s $7 billion workforce.
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.
Garg later apologised, but this has not stopped three of his leadership team members from quitting. Other leaders are also expected to quit the bank.
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.
According to The Daily Beast, this is the first wave of resignations and The Company expects more.
Garg said in an apology to his staff that he “failed to show sufficient respect and appreciation for those who are affected” and their contributions towards Better.
He said, “I made the decision to layoff but I communicated it incorrectly.” I did it to embarrass you.
“I’m sorry that this was a bad way to communicate the news.
“I’m deeply sorry, and I’m committed to learning from this situation and being the leader you want me to become.”
Garg’s call participants found that their computers were starting to crash after the meeting.
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.
Better’s headquarters is 44,000 square feet of office space on the 59th floor of 3 World Trade Center in Manhatta
On professional network Blind, the father-of-3 wrote: “You know that at most 250 people were working an average time of 2 hours per day while clocking over 8 hours per day in the payroll systems?
They were taking from you and our customers, who are the ones paying our bills. He advised that he should get educated.
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.”
He described earlier in his Zoom conversation how difficult it was to let go of staff members and how much he hoped that he wouldn’t cry like he did in the past.
He stated, “This is my second career and this is something I want to do.”
“The last time it was done, I wept.” “This time, it’s my hope that I will be stronger.
‘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.
Tanya Gillogley (left), the head of PR, and marketing chief Melanie Hahn (right) quit following the December 1 firings
After the December 1 Zoom Call, Patrick Lenihan was also removed as vice president for communications.
He said, “As we began to slow down the pace of hiring we saw some alarming stats and a lot of our customers weren’t getting the service they deserved from each other’.
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 performance remaining employees would also be closely monitored.
Fortune was told by a Fortune employee that the tone he used was very harsh and threatening.
Garg was also quoted as saying that two others warned of a “bloodbath” next year.
One source said, “It was very odd.” “The comments were troubling.
Fortune was told by Garg that he didn’t threaten his staff, and that “no additional monitoring is taking place” other than that required by the regulator.
But he admitted that his firm looked more closely at productivity data.
His ‘bloodbath” comment was taken out of context, and was in a wider reference to the mortgage industry.
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 lay-offs, it has still 9,000 employees in the US and India.
Fortune reported that Garg said the board of the company and its investors had been ‘totally supportive” about job cuts and the way they were managed. Garg refused to identify the board members and investors who offered support.
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.
This week, it received $1.5 million in convertible and debt notes ahead of its scheduled debut.
After announcing that it would be going public via a Special Purpose Acquisition Company in May, Better received $750 million in cash last week. It now stands at $7.7B.