A botched rollout of pre-holiday layoffs at Better Mortgage has prompted the CEO to apologize to the employees who remain, and led top communications officials to resign.
Vishal Garg | Photo credit: Better.com
CEO Vishal Garg sent an email to staff apologizing for how he handled the layoffs, according to a verified Better employee who posted a screenshot of the email Tuesday on the anonymous professional network Blind.
“I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better,” Garg wrote in the email. “I own the decision to do the layoffs, but in communicating it I blundered the execution. In doing so, I embarrassed you.”
A video of Garg terminating the 900 employees went viral over the weekend, with the chief executive saying he was going to try not to cry during the announcement.
But Garg didn’t cry on the Zoom call, and later defended the layoff decision enthusiastically in an anonymous Blind post, arguing that nearly a third of the terminated employees were unproductive. He doubled down on this argument in an interview with Fortune, during which he confirmed that he was the author of the post.
“You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking in 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,” Garg wrote in the post. “Get educated.”
Amid this uproar within and outside the company, Business Insider and The Daily Beast have independently reported the company’s vice president of communications, head of marketing and head of public relations each submitted their resignations over the past week.
“This is a first wave of resignations, and the company expects more,” a source told The Daily Beast.
The layoffs — which amounted to 9 percent of the company’s workforce — were a result of changes in the market since the start of 2021, Garg told the employees on the termination call.
“I wish we were thriving enthusiastically as we were at the beginning of this year,” Garg said on the call. “But that’s not the case. And I am sure that you will leave us and be more successful, more fortunate and luckier in your next endeavor.”
The layoffs put Better in a position to grow as lenders focus more on purchase loans and less on refinancing, the company has said.
In Garg’s apology email, he said Better would share more on its plans for the year ahead at its next “all hands” company meeting.
“We are also taking fast steps to make sure we are very transparent and aligned as a company on the goals for 2022, the metrics that matter most, and how we can all work together even better to serve our customers and achieve our mission,” Garg wrote.
Some employees who remain at the company have not been impressed with how Garg has handled the aftermath. Some employees told Fortune that after their colleagues were laid off last week, Garg told them the company would be closely watching their productivity as well.
The verified employee who posted Garg’s email to Blind described it as a “joke of an apology.”
On the termination call, Garg said U.S. employees are being provided with four weeks of severance, one month of full benefits, and two additional months of COBRA (Consolidated Omnibus Budget Reconciliation Act) health coverage.
New financing agreements with Aurora Acquisition Corp., Novator Capital, and SoftBank will provide $750 million in up front bridge financing, leaving Better with more than $1 billion on its balance sheet as it continues to move forward with plans for a SPAC merger with Aurora.
SoftBank and Novator Capital have committed to provide up to $750 million in additional financing through a convertible note at Better’s option within 45 days of closing the merger. SoftBank invested $500 million in Better in April, by purchasing shares from existing Better stockholders.