A US mortgage firm is being criticised after the boss fired 900 staff – all on the same Zoom call.
That’s around 15 percent of the Better.com’s workers.
In its promotional material, the mortgage company says it wants to make the mortgage process better for consumers, using technology to do this.
Cash injection
Last week Better got $750m (£565m) from investors, and in an email to employees Better’s CFO Kevin Ryan told employees the company would have $1 billion (£752m) on its books.
He said: “With this new structure the company will fortify our balance sheet and position us as extremely well capitalized in a tough mortgage market. Surviving is winning and capital ensures survival”
On a blog on the Better site in June – before that cash injection – the CEO Vishal Garg talked about the company’s $254m (£191m) in funding from investors.
He said the firm had increased its investor base and tripled the team, outgrowing two offices in the notoriously expensive borough of Manhattan in New York.
Mr Garg also said: “We’re only continuing to add talented, passionate people who believe in our mission. All the while we’ve helped tens of thousands of people purchase or refinance their homes. And we’re just getting started.”
That Zoom call
On the Zoom call, meanwhile, Mr Garg, told employees they were in an “unlucky” group that was “being laid off”: “I wish the news were different. I wish we were thriving”
He said: “This is the second time in my career I’m doing this, and I do not, do not wanna do this.”
He added: “The last time I did it, I cried, this time I hope to be stronger.”
On twitter, the company has been slated by potential customers, who criticised it for “shocking behaviour”.
Here are some of the responses on the company’s twitter page:
“We were in the middle of refinancing our mortgage with @better.com and backed out of it today. We’re going to use a more ethical lender that doesn’t fire their employees before the holidays. I sincerely hope your CEO didn’t cry too much. Bye!”
“Layoffs are sometimes inevitable but not in the way it was done. Shameful behaviour by your CEO.”
“worstdotcom”
“Your mortgages don’t leave me comfortable knowing you’d fire 900 people just before the holidays after taking in a giant bonus. You’re trash.”
Not the first time
This isn’t the first time Mr Garg has been criticised. Last year, Forbes got an email sent by him to staff. In it 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.”
According to the Gov.UK, this mass-firing method would not be legal in Britain. Employees in the UK have the right to a written statement from the employer with specific reasons as to why they have been dismissed.
This must be supplied within 14 days of being asked for it.
It also says that while employers do not have to give notice to employees, they must show a valid reason for the dismissal that can be justified and they must also be able to show they have acted reasonably in the circumstances.
Chris Deeley, Employment Solicitor at JMW Solicitors, says: “While it might be legally acceptable in the United States, this approach to business restructuring would certainly not be permissible here in the UK, where the rules around redundancy process (and dismissals more generally) are considerably more stringent. Even notwithstanding the legal position, employers finding themselves in such a situation should also ensure they act with caution and compassion, to avoid further alienating retained staff or indeed customers.”
Click here to see the Zoom video of Mr Garg speaking to his employees.
HR Review has contacted Better.com for a response.
Feyaza Khan has been a journalist for more than 20 years in print and broadcast. Her special interests include neurodiversity in the workplace, tech, diversity, trauma and wellbeing.
- Feyaza Khan
- Feyaza Khan
- Feyaza Khan
- Feyaza Khan
