Better.com CEO Vishal Garg
Better.com
Vishal Garg, CEO of unicorn mortgage lender startup Better.com—after receiving a $750 million cash infusion with a valuation of around $7 billion—bluntly informed his 900 employees that a large number of people will be fired in a cold, awkward one-way video announcement.
Looking visibly uncomfortable, Garg said that 15% of the workforce would be laid off. In a monotone voice, the chief executive stated, “This is the second time in my career I’m doing this and I do not want to do this. The last time I did it, I cried; this time I hope to be stronger.”
Three of Better.com’s top executives have reportedly resigned from the company after the unicorn mortgage lender was hit by a wave of backlash over the leaked Zoom call. Better.com head of marketing Melanie Hahn, head of public relations Tanya Hayre Gillogley and vice-president of communications Patrick Lenihan have all stepped down from the company, Insider reported.
In a message from the founder and CEO, Garg issued an apology on the company’s blog. The chief executive wrote, “I want to apologize for the way I handled the layoffs last week.” He continued, “I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better. I own the decision to do the layoffs, but in communicating it, I blundered the execution. In doing so, I embarrassed you.” The CEO went on to say that he is “deeply sorry” and “committed to learning from this situation and doing more to be the leader” they expect him to be.
Fortune reported that the embattled CEO accused “at least 250″ terminated staffers of stealing from the company and customers by working just two hours a day. In an email to employees obtained by Forbes last year, Garg brazenly wrote, “HELLO—WAKE UP BETTER TEAM. You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and…DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME.”
Despite having referred to his staff as “dumb dolphins,” the CEO told his employees in the apology memo, “At Better, your dedication, focus and expertise are essential in the vital work we are doing to unlock the value, joy and opportunity of homeownership for our customers across the country. I couldn’t be more grateful for all you are accomplishing for the customers we serve.”
History seems like it’s repeating itself. On Tuesday, the embattled company took the “difficult step of streamlining” its operations by laying off 3,000 people. Better said that employees impacted by the downsizing would be properly notified personally over the phone and eligible for extended medical benefits, severance and help finding a new job.
In what seems like a glitch, workers were notified of their firings by seeing a severance payment in their bank accounts.
A verified Better professional leaked the internal layoff announcement email on Blind Tuesday.
“Hi folks, BetterWolf here! I posted last night that layoffs are coming @ Better.com. Here’s the announcement that just went out. Over 4,000 of my co-workers were let go today! FU Vishal Garg.”
On the positive side, the letter was empathetic.
“Team,
We have an important and difficult announcement today, and the leadership team and I want you to hear it from us first.
As you know, the residential real estate market has been changing rapidly, and our entire industry is facing a dramatic drop in origination volume due to rising interest rates. It is clear —after careful, comprehensive review—that we will need to do more to ensure a strong path forward for the company and the vital work we are all doing to make homeownership more accessible for everyone.
Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the U.S. and India in a substantial way. We have huge opportunities ahead to grow and to serve, but we must adjust to volatility in the interest rate environment and refinancing market to get there successfully. This decision is driven heavily by the headwinds affecting the residential real estate market; it is in no way reflection on the personal performance of any departing team members, all of whom have contributed to Better’s success. While it does not make this any easier other companies across the mortgage industry (both old and new) have had to make similar decisions over the last [two] months.
Across functions, specialists and offices, we have an incredibly talented team at Better, and losing valued colleagues is never something we wish to pursue. We do not take this decision lightly and want to let you know about the important steps we are taking in the coming days to support the transition for coworkers leaving Better. We are also taking steps to ensure seamless service for our customers.
All Affected Employees Will Be Contacted Personally
We are doing everything possible to personally reach all employees whose jobs will be eliminated to discuss this with them first. Anyone most directly affected by this announcement should receive a call over the coming days from a member of the Better leadership team. We will direct these communications to the personal phone and email we have on file. Following that call, each affected employee will receive an email to their personal email address from HR with additional details about transition support.
Affected employees will be eligible for a minimum of 60 working days – and as much as 80 working days – of cash severance payments. We have made sure that this financial support for departing employees is at or beyond what is required by law. Those affected directly by this change will receive details via email.
Sincerely
Kevin and the Better Management Team”
Better.com Layoff Announcement
Blind
