Better.com CEO Vishal Garg’s return makes it worse for the housing lender
Instability at US-based digital mortgage lender Better.com continues, with senior executives putting in their papers days after Vishal Garg returned as CEO. The zoom blunder has cost CEO Vishal Garg severely, as senior executives walk out on him following his poor display of leadership.
Following Garg’s recent return, some of the senior executives who have resigned include two board members, Raj Date and Dinesh Chopra, and most recently, EVP Customer Experience, Sales and Operations, Sarah Pierce, and SVP Capital Markets and Growth, Emanuel Santa-Donato.
“Throughout my time, I would always get asked ‘what keeps you at Better?' From my first day to my last, my answer never changed: the people. For six years, I got to work with some of the smartest and hardest working people I have ever met," Pierce posted on LinkedIn.
Pierce was reportedly upset with the way Garg publicly disparaged the employees, the majority of whom had reported to her, after callously laying them off via Zoom. “To my colleagues at Better, I will miss you. And to the people who have left Better, it has been so inspiring to see the unbelievable steps you are taking in your careers and the amazing companies you are joining," she added.
The digital mortgage lender decided to lay off about 900 employees in December 2021. What made this worse was the CEO announced this decision over a rather brutal zoom call.
Just ahead of the festive season, Garg not only made this bizarre mistake, he went on to publicly accuse hundreds of affected staffers of “stealing” from their colleagues and customers by being unproductive. The accusations came out in a series of messages Garg posted on anonymous professional network Blind days after the layoff.
The callous and insensitive manner in which Garg laid off hundreds of his employees created a furore, and what made it particularly incomprehensible was that it came soon after Better had raised about $750 million from Aurora Acquisition Corp and SoftBank, which the company planned to use to double down on existing businesses.
In the immediate aftermath of the disturbing zoom call, senior communications and public relations executives stepped down. In fact, top three executives of Better.com (Head of Marketing Melanie Hahn, Head of Public Relations Tanya Hayre Gillogley, and Vice President of Communications Patrick Lenihan) resigned from the company after the mass layoffs, the Insider reported. The divisive style of leadership displayed by Garg was directly responsible for the decision, Insider quoted sources as saying.
The outrage from staff and media led to Garg issuing a public apology. However, it was too late and the damage had been done.
“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. I realize that the way I communicated this news made a difficult situation worse. I am deeply sorry and am committed to learning from this situation and doing more to be the leader that you expect me to be,” said Garg in the message.
Immediately afterwards, Garg went on a month-long temporary leave to soothe the frayed nerves and dismay that had gripped the employees. However, his return is fuelling more damage, causing an exodus of senior executives at the firm. Reportedly, employees were leaving the company in "droves" after Garg returned to his role as CEO.
The cold zoom call continues to cast a shadow on not just the CEO, but also on the organisation as a whole. It remains to be seen how the firm stops further damage to employee morale and rebuilds trust in the leadership.