Better.com, a leading real estate technology company, experienced a tremendous shake-up this week when its CEO, Vishal Garg, announced that he would terminate around 900 employees over a Zoom video call. This news shocked the world, and people have been speculating why such a drastic decision was taken.
This article will look at the background behind this decision and its implications for the real estate industry.
Better.com CEO fires 900 employees over Zoom
Better.com is a rapidly growing tech company founded in 2014 by CEO Vishal Garg and CTO Erik Bernhardsson. The U.S.-based mortgage service provider proved successful, completing over half a billion dollars in mortgages to more than 60,000 clients within the first five years of operation. Better’s vision was “to make finding a home loan easier and more transparent for customers” by eliminating paperwork and ensuring customers’ financial needs were met efficiently by providing prequalified rates with personalised services.
Though Better had achieved enormous success until 2021, times were changing rapidly due to the COVID-19 pandemic. In February 2021, Gartner reported a decrease in mortgage originations due to uncertainty surrounding the global pandemic. This resulted in layoffs at Better. On March 24th, 2020, better announced they would reduce headcount by 900 people through Zoom calls led by CEO Vishal Garg informing staff of their termination remotely regardless of whether they worked remotely.
Overview of the CEO
Vishal Garg is the co-founder and CEO of Better.com, a digital mortgage company based in New York City. Vishal first gained experience in the financial sector when he worked as an engineer for Goldman Sachs after graduating from Stanford University in 2006. In 2015, Vishal left his job to pursue his dream of starting a tech enabled mortgage company, launching Better.com to make mortgages faster, easier, and more transparent for its customers.
The company has grown rapidly and now employs over 550 working remotely worldwide. However, due to the financial impact of COVID-19 on the business and industry overall, on June 3rd of 2020 Vishal had to make the difficult decision to lay off 900 employees over a Zoom call which was met with controversy due to how impersonal it was compared to other companies managing layoffs with one-on-one face time meetings or pre recorded webcasts. Following this news many people have started scrutinising Vishal’s leadership choices before and after this event.
The Zoom Call
The sudden announcement of the news that Better.com CEO Vishal Garg had fired 900 employees via Zoom call shook the business world. This was the first time a CEO had ever fired so many employees at once over the platform, making it a historic moment that has been talked about ever since.
Let’s take a closer look at the Zoom call that changed the fate of so many.
Description of the Zoom call
On June 10, 2020, numerous media outlets reported that Better.com CEO Vishal Garg had fired 900 of his employees over a Zoom call. The call was to deliver the news that the company was making large cutbacks due to the pandemic.
Boxed in at home with no access to the in-person reassurances (handshakes and hugs) from sharing life-altering news in person, Vishal read from a script spanning 15 minutes. During the call, he explained that due to market conditions Better.com could no longer sustain having over 1,000 employees — approximately one third of its entire staff — so it had decided to reduce headcount by 900 positions across all levels of its organisation. He also discussed how those most affected can receive assistance during this time, including assisting with career coaching and job search efforts over the next few months and offering financial support until they can secure new jobs elsewhere.
At the close of his statement, Vishal finished by thanking all those impacted for their hard work and dedication throughout their time at Better.com and wished them luck during this difficult transition period for themselves and their families.
This was undoubtedly a difficult decision for Vishal who has always strived to create an environment where all employees feel valued and cared for at Better.com.
Reactions of the employees
The news that Better.com CEO Vishal Garg had fired 900 employees over Zoom hit like a shockwave, provoking a range of reactions from employees.
Many were distraught, as they had not been given advanced warning that their positions would be eliminated. Many felt stunned, with emotions ranging from confusion to sorrow at having lost their jobs in such a sudden and impersonal fashion. Others were angry and bitter, with many feeling betrayed by the company that promised them stability before delivering an unexpected layoff. A few were more accepting of the decision, seeing it as an understandable business imperative given the economic conditions of 2020.
The reaction to Garg’s Zoom call indicates the complicated dynamics at play when layoffs occur – on both sides. For those who have been let go there is hurt and fear often wrapped up in feelings of surprise and uncertainty about what comes next. At the same time for leaders making such difficult decisions there are questions about how to do so in the most effective yet sensitive manner possible under difficult circumstances.
The recent news of the Better.com CEO firing 900 employees over Zoom sent shockwaves through the business community. In remote work, the decision has been seen as a harsh statement of the changing landscape. Moreover, the implications of the CEO’s decision weigh heavily on the employees, the company, and the industry as a whole.
This article will look at the aftermath of the incident and what it means for the business world.
Impact on the company
The decision to fire 900 employees over Zoom by the CEO of Better.com had a significant impact on the company and its employees, and raised questions about the right way to handle mass layoffs due to economic circumstance.
Quickly after the Zoom call was made, Better.com’s stock price declined and its reputation took a hit within the tech community. When news of the termination of 900 employees spread throughout Silicon Valley, it stirred controversy within hiring circles and raised questions about how CEOs should lead during economic downturns.
For Better.com’s remaining employees, this event became a cautionary tale about job insecurity in technology firms despite their rapidly rising valuation. After firing such an incredible amount of people over video conferencing platforms, many employees expressed mistrust in company leadership or apprehension over potential future layoffs that could occur similarly. This feeling was shared by remote workers especially as they could not be present for final conversations or support one another as they grieved their terminations or those of their colleagues.
On top of this internal instability, there was also external speculation into whether these terminations were necessary or simply based on economics versus other factors like performance reviews and results-based outcomes that would more accurately gauge those that should stay employed with the company relative to those who may benefit more from outside opportunities during such a difficult recession period in American business history.
Reactions of the public
The news of the Better.com CEO firing 900 employees over Zoom stirred a range of reactions from the public. While many people commended the company for taking action to protect its business and customers, there was widespread criticism that such drastic action should not have been taken without warning or proper compensation.
Other criticisms were aimed at the CEO’s approach — that in a time when morale is at an all-time low, and so many are dealing with financial insecurity, such mass layoffs could have handled differently. The better and more humane approach could have been to provide sufficient notice period, warning and severance packages to those affected.
Furthermore, while it can be argued that Better was trying to do what was best for its bottom line, perceptions of corporate social responsibility are increasingly important during economic downturns like these — especially to customers whose loyalty is key to survival in times of crisis.
Essentially, many worry that the move will ultimately damage Better’s reputation long-term as customers may find such an approach unfeeling or excessive in light of current circumstances. Stress levels may already be high due to job insecurity across other sectors, so this move seemed particularly insensitive for many.
Better.com CEO Vishal Garg recently made headlines when he fired 900 employees via Zoom. Though this action has been met with largely negative opinions, it is important to evaluate the macro-level implications of this decision.
In this analysis, we’ll take a closer look at the decision making process behind this move, the effects on the future of Better.com, and the potential long-term consequences.
Reasons for the decision
The CEO of Better.com, Vishal Garg, recently made the difficult decision to layoff 900 employees over Zoom due to economic conditions brought on by the COVID-19 pandemic. Many may question why such a drastic measure was necessary. However, Vishal Garg has said that he believed the move was critical for ensuring that the business remained sustainable in uncertain times and would enable them to preserve their ability to continue delivering great products and services for customers.
It is difficult to precisely measure how much of an impact these layoffs may have had on Better’s bottom line or how long it will take for the business to recover from this setback. However, we can infer from these decisions that Better’s leadership felt it necessary to reduce operating expenses significantly to stay afloat during turbulent financial conditions. In addition, some reports have indicated that many newly laid-off employees were engaged in resources-intensive roles where they faced limited career growth prospects. At the same time, the unit struggled with reduced revenue due to covid-led economic constraints faced across industries globally. This could suggest that improving profitability during such times must come at expense of particular departments or positions which could not be leveraged towards any tangible upside potential given current resource crunch at Better proper.
When the Better.com CEO announced that he was firing 900 employees over Zoom, the news generated a great deal of discussion about the ethical implications of his decision. One of the chief ethical considerations raised is that this method of firing employees did not give them any meaningful opportunity to defend themselves or plead their case for staying at their job. In essence, it denied them due process and took away their agency in an unfair way.
The Better.com CEO’s decision also raised questions about whether or not firing 900 people over Zoom was humane, particularly since many of the employees were undoubtedly uncertain about what had happened until shortly before or after it occurred. This method of firing implies a cold, calculated attitude toward the fired employees rather than one marked by compassion and respect.
Furthermore, some have questioned whether or not it effectually expressed any genuine empathy toward those affected: while individual conversations with each employee would certainly be more emotionally tolling on the CEO, it would allow him to address employee concerns more meaningfully; possibly explain why certain decisions were made; and provide real-time emotional support to those affected by this sudden shift among other considerations.
Ultimately, this situation presents an interesting ethical dilemma that raises many perspectives which need to be explored more thoroughly to jumpstart true debate over how executives handle situations such as these in future corporate environments.