The CEO of an online mortgage lender fired 900 of his employees in a brutal Zoom call – then slammed them over being so lazy they effectively ‘stole’ from customers.
Vishal Garg axed around nine per cent of Better.com’s workforce last Wednesday, including its entire diversity, equity and inclusion team, which deals with complaints about racism and sexism in the workplace.
The blunt call saw Garg say: ‘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.’
The 43-year-old said that the ‘market has changed’ meaning savage cuts to the $7 billion company’s workforce were needed to avert disaster.
One axed worker filmed the call and shared it online, complete with a moment where they cursed at Garg as he confirmed the mass lay-offs at 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 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 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.
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)
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. 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 wielded the ax while blaming market fluctuations, despite a $750 million cash infusion the mortgage company received last week.
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+
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.’
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, 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.
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 nex 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.
Better’s headquarters is 44,000 square feet of office space on the 59th floor of 3 World Trade Center in Manhattan
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.
It has added 2,000 employees since Covid struck and was on target to bring in $800 million in revenue this year, according to The Information.
And despite the lay-offs it still has 9,000 staff across the US, India and the UK.
Garg told Fortune that the firm’s board and investors were ‘totally supportive’ about the job cuts and they way they were handled. He refused to say which board members or investors offered their support.
Two current employees and an ex-aide told the site that Garg was renowned for being ‘erratic’ on Better’s internal Slack messaging system and in company meetings.
The CEO is said to be demanding of his staff, right down to the smallest details.
Office managers were criticized for failing to keep the mini fridges filled with water from Fiji or Perrier.
Garg also insisted on bottles of Gerolsteiner, his sparkling beverage of choice, according to Forbes.
‘Why do we have biscotti here like this??’ he once demanded from office managers.
In one furious email obtained by Forbes, he 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.’
In August, The Daily Beast reported that one of his closest executives, Elana Knoller, was given stocks potentially worth tens of millions of dollars, $8,000 per month for two homes and other perks.
Knoller was eventually placed on administrative leave 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.’
It comes as Better, which featured in the Forbes Fintech Top 50, hopes to go public before the end of the year.
It received $1.5 billion in debt and convertible notes earlier this week ahead of its planned debut.
Better, which is 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). The company now has a valuation of $7.7 billion.
Better provides ‘fast, low-fee approvals for mortgages,’ according to its website.