In December 2021, Vishal Garg fired 900 of his employees on a Zoom call. To make matters worse, the founder and CEO of New York City-based mortgage lender Better.com also called those employees “unproductive” thieves of company time. Public criticism of Garg went viral, and his board ordered him to take a month-long break from his role. Garg has since apologized, returned as CEO–and fired thousands more employees. Here, Garg analyzes his errors.
“In 2020, we grew 900 percent and made $500 million in cash profit. Low interest rates led to a surge of mortgage refinancings, and Covid meant customers didn’t want to go to a physical location to get a loan, so they were all coming to us.
To keep up with demand, Better went on a hiring spree. So a company with, like, fewer than 1,000 people exploded in size to 11,000 people.
The problem was that our recruiting systems weren’t designed to scale–they were built to bring in people who were really committed to the company. But as we grew, those systems should have shifted to finding people focused on the customer.
Plus, the more we hired, the less productive individual workers became. By the time we came back to the office in the fall of 2021, our missed call rate had gone up 40 percent.
That’s when I got really angry. Customers were calling with questions about the most important financial transaction of their lives and no one was there to pick up the phone. Employees were not doing their jobs. Plus, we were losing money. So I decided to start laying people off.
I regret not being more empathetic in doing so–not thinking about what it means to be on the other side of such a call. All those people saw was their CEO saying, ‘We’re not working hard enough, not doing our part.’
We’ve since done an additional four rounds of layoffs, bringing our head count down to around 1,200 employees. And I’ve been working with an executive coach, Ron Beller, on being less critical and demanding–to come to terms with the idea that not everyone shares my passion for the company and willingness to work to the bone. Some people are perfectly happy with where they are and what they do and that’s OK.”