Better.com CEO Vishal Garg is apologizing for having fired 900 workers at the mortgage company earlier this month in a video call, saying he “blundered.”
Garg has faced a backlash on social media after videoof 9% of the company’s workers, which he blamed on issues such as the market and productivity. The company had asked the employees to participate in a Zoom call, during which he informed the attendees that they were dismissed effective immediately.
In the video, Garg sits alone at a white table, dressed in business-casual slacks, shirt and a blue vest, and confides that he has previously had to fire people, saying that he had cried. “This time I hope to be stronger,” he told the terminated workers.
The ensuing criticism on social media has been fierce, with some LinkedIn users calling it “crass” and blasting the timing of the layoffs just before the holidays. In an apology posted to Better.com’s website, Garg expressed regret for his approach.
Meanwhile, three top communications executives reportedly quit after the mass firing, according to Insider.
“I want to apologize for the way I handled the layoffs last week,” Garg wrote in a message posted to Better.com’s website. “I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better.”
He added, “I blundered the execution.”
Garg’s message is addressed to current workers at the company, while no direct apology is made to the workers who were abruptly fired.
Christian Chapman, a former trainer at Better who was one of the 900 employees laid off last week, said the firing was a shock and came out of the blue, noting that he was promoted in June and got a raise in October. The company also had just received $750 million in funding days before the firing.
Chapman was critical of Garg’s apology. Being fired over Zoom was like a “kick in the gut,” he said, recalling the thoughts running through his mind as the executive delivered the news: “First, is this really happening? And why is it so cold and callous — it seems to lack empathy. Is this capitalism at its worst? We had just gotten $750 million in liquid funding.”
Meanwhile, Better isn’t the only real estate business to run into headwinds, which has surprised some observers given that the real estate market remains strong. Zillow last monthas it shuttered its home-flipping operation, blaming difficulty in forecasting home prices.
But a falloff in demand from potential homebuyers could be to blame for Better’s issues, according to data from Similiarweb, which tracks web traffic. Visits to Better’s “start” page, where homebuyers can begin the process of finding a mortgage, has decreased more than 80% since January, the company said.
As mortgage rates have crept higher this year, the number of applications has declined but still remains above pre-pandemic levels, according to research from Yardeni Research.
The $750 million cash infusion is expected to advance the company’s plan to go public through a so-called Special Purpose Acquisition Company, or SPAC, according to TechCrunch.
But Better.com is delaying its public listing due to changes it made a day before it fired workers, according to Bloomberg. Because it revised terms of its merger with “blank-check” company Aurora Acquisition Corp., it will push back the closing of the transaction, the wire service noted.
Garg’s LinkedIn bio says he dropped out of an analyst training program at Morgan Stanley when he was 21 to start MyRichUncle, a private student loan company that went public in 2005 and was later acquired by Merrill Lynch.