Three senior executives have resigned from an online mortgage lender after the CEO fired 900 of his employees in a brutal Zoom call - with...
Three senior executives have resigned from an online mortgage lender after the CEO fired 900 of his employees in a brutal Zoom call - with more expected to follow suit.
Vishal Garg, the CEO of Better, on December 1 told nine per cent of the company's workforce they were losing their jobs - then in a blog post attacked them for being so 'lazy' they effectively 'stole' from customers.
Garg later apologized, but that has not prevented three of the leadership team quitting, with others expected to leave the embattled lender too.
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.
'This is a first wave of resignations, and the company expects more,' a source told The Daily Beast.
Garg, 43, got rid of the company's entire diversity, equity and inclusion team, which deals with complaints about racism and sexism in the workplace.
Better.com's controversial CEO Vishal Garg, 43, fired 900 employees over a Zoom call claiming market fluctuations performance, and productivity. However, the mortgage lender, backed by Softbank, received a $750 million cash infusion last week, after announcing in May it was going public through a Special Purpose Acquisition Company (SPAC)
Tanya Gillogley (left), the head of PR, and marketing chief Melanie Hahn (right) quit following the December 1 firings
The vice president of communications, Patrick Lenihan, also resigned after the December 1 Zoom call
In his three-minute call, Garg told them bluntly: '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.'
He said that the 'market has changed' - meaning savage cuts to the $7 billion company's workforce were needed to avert disaster.
The firings came despite a $750 million cash infusion the mortgage company received last week.
The boss also said market efficiency, performance, and productivity were to blame for the firings, adding that it was necessary for the company to 'move in order to survive.'
He later apologized in an email to staff, admitting he 'failed to show the appropriate amount of respect and appreciation for individuals who are affected and for their contributions to Better.'
He added: 'I own the decision to do the layoffs, but in communicating I blundered the execution. In doing so, I embarrassed you.
'I realize that the way I communicated this news made a difficult situation worse.
'I am deeply sorry and am committed to learning from the situation and doing more to be the leader that you expect me to be.'
Those on the call found their company-owned computers beginning to shut down 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, who has been accused of being 'erratic' by workers, later doubled-down in a scathing blog post which saw him lay into his staff for 'stealing' through laziness.
The father-of-three wrote on professional network Blind: 'You guys know that at least 250 of the people 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. Get educated,' he added.
Speaking to Fortune, Garg - who once threatened to staple a former business partner to a wall and burn him alive, according to court documents - confirmed he had made the comments under the anonymous username 'uneducated', but refused to back down.
'I think they could have been phrased differently, but honestly the sentiment is there,' he said.
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,' Garg abruptly announced on the call. 'Your employment here is terminated effective immediately'
Earlier, he described in his Zoom call how hard it was for him to fire the staff and how he hoped he would not cry as he had done in the past.
'This is the second time in my career I'm doing this and I do not do not want to do this,' he said.
'The last time I did it, I cried.
'This time, I hope to 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.
A firm spokesman later corrected the boss's figure, and said that the actual proportion of staff who'd been laid off was nine per cent.
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.
'As we started to slow down our pace of hiring, we saw some alarming statistics and a number of our customers were not getting the service that they deserved from our teammates,' he said.
Garg's rationale behind the firings was further debunked by reports that the CEO accused workers of being unproductive and stealing from the company by working two hours and clocking 8+
Staff said they were stunned by the move and criticized Garg for another 'threatening' companywide call he held after the layoffs were announced, saying that the performance of remaining employees would be closely monitored.
'His tone was extremely harsh and threatening,' one employee told Fortune.
Two others said that Garg warned next year would be a 'bloodbath.'
'It was just very strange,' said one of the sources. 'The comments were disturbing.'
Garg told Fortune that he did not threaten staff and that 'there is no additional watching taking place,' aside from that which is already required by the regulator.
However, he did admit the firm was looking more at productivity data.
He said his 'bloodbath' comment had been taken out of context and was a broader reference to the mortgage market.
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