What happened at Better.com?
Did you hear about Better.com’s CEO, Vishal Garg, firing 900 employees simultaneously on a Zoom call? It is one of the most shocking things we’ve heard of, especially as you dig into the details.
We imagine it came as a shock to those 900 people. After all, Better was only founded by Garg in 2016, and in five years, they had funded more than $30.9B in loans. 2020’s revenue grew by 850% alone. Better was also recognized as an Inc. Best Places to Work 2020, a Fortune 30 Best Small and Medium Workplaces in Financial Services and Insurance, and an American Banker Best Fintechs to Work for 2020. And this year, Better made moves to go public via SPAC and a valuation of $6.9B. Could this actually be happening?
Maybe there were signs that he was capable of something like this…
- In 2020, that same year his company grew by 850%, Forbes obtained an email where he refers to the employees as “slow,” “dumb,” and “embarrassing” to him. We think it’s safe to say that Garg was not a fan of either Robert K. Greenleaf (servant leadership) or Dale Carnegie (How To Win Friends & Influence People).
- There are also numerous ongoing lawsuits against him from his investors and one of the world’s largest money managers.
- Then there is the troubling lawsuit from his ex-business partner and college friend that accuses Garg of stealing money and technology from their company.
Let’s get back to the mass firing Zoom call. Garg was quoted as having said, “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.” He pointed to “the market, efficiency and performances and productivity” as reasons while making no mention of a massive cash infusion—hardly a heartfelt move.
And this is how Garg followed up that Zoom call…
- He did a town hall for the remaining employees 30 minutes after laying off 900 of their coworkers. In it, Garg pointed to having lost $100M last quarter and that it was a move he should have made three months prior.
- Garg placed blame on their insurance partners.
- He also told remaining employees to expect stricter deadlines and more micromanagement.
- Garg opted to post on Blind, the anonymous professional network, that everyone knew that “at least 250 of the people terminated were working an average of 2 hours a day while clocking in 8 hours+,” and that “they were stealing.”
The aftermath has been a PR nightmare for Garg and Better. Further, it’s led to multiple resignations, including three executive team members. And on Friday, the board announced that Garg would be “taking time off effective immediately.”
There has been one of the more interesting stories to unfold this year.
- Inc.: How Digital Mortgage Company Better Grew 850 Percent Last Year
- TechCrunch: Better.com gets $750M cash infusion in new agreement with its SPAC backers
- Forbes: The $4 billion fintech startup is hurtling towards an IPO. But its volatile leader is fighting multiple lawsuits that could complicate his ambitions.
- Fortune: Better.com’s morale and SPAC merger success in question after CEO’s unruly comments
- Business Insider: A leaked video shows Better CEO Vishal Garg explaining laying off hundreds of people before the holidays: ‘We should have done this three months ago’
- Fortune: Better.com CEO blasts laid-off employees, accusing them of ‘stealing’ by working only two hours daily
- Business Insider: Better.com CEO accused hundreds of the 900 people he laid off on Zoom of ‘stealing’ by working only 2 hours daily
- Twitter: Tweet from Ankur Kulshrestha showing Garg’s comments on Blind
- Business Insider: Better’s top marketing, PR, and communications executives have resigned after mass layoffs at the online-mortgage startup
- Vice: Better CEO ‘Taking Time Off Effective Immediately’: Email