In a video leaked to Coins2Day, the embattled CEO of mortgage startup Better.com is seen addressing employees immediately after having laid off 900 staffers—using language that some Better employees later said made them feel threatened.
In a 35-second video clip, Vishal Garg, who has since taken an indefinite leave of absence, underscored that New York City–based Better would be more focused on deadlines and that employees wouldn’t be allowed to fail more than once.
“Parts of this organization that have not been deadline-centric before will be extremely deadline-centric going forward,” Garg told employees during the video call two weeks ago. “You will not be allowed to fail twice. You will be encouraged to fail once, but not allowed to fail twice. Not meeting deadlines will not be acceptable.”
He continued, “Is that going to change things a little bit? Yes. It’s going to make things better, and that’s what we’re here for.”
It was these comments, as well as subsequent statements that Garg confirmed he made on an anonymous online professional network, that employees told Coins2Day felt intimidating or overly critical. In the online posts, which he later confirmed came from him, Garg accused hundreds of staffers he had laid off of “stealing” from colleagues and customers by working only two hours a day.
“His tone was extremely harsh and threatening,” one current employee, who asked not to be identified for fear of retribution, told Coins2Day.
In an interview in the days after the layoffs, Garg said he didn’t mean his comments to come off as threatening. He did confirm the company would more closely monitor the productivity data of individual workers, which some employees said they felt was invasive.
After Coins2Day and other media outlets published articles about Garg’s meeting and online posts, he issued a companywide apology.
“I own the decision to do the layoffs, but in communicating it I blundered the execution. In doing so, I embarrassed you,” Garg wrote in the email.
Contacted about this article, Garg declined to comment. A Better.com spokeswoman didn’t respond to a request for comment.
Garg’s video call, a portion of which was given to Coins2Day anonymously, came after he laid off 9% of the company amid a slowdown in the mortgage industry. Shortly after media coverage about the layoffs, and how Garg handled them, Better increased the severance it paid to its laid-off U.S. Employees to 60 days, instead of the original four weeks, according to an email sent to laid-off employees earlier this month that was seen by Coins2Day.
Last week, Better.com’s board told the company that Garg was stepping away from his duties, effective immediately, and that the company’s chief financial officer would take over day-to-day operations. This also followed a report by Vice that Garg had allegedly called one of the company’s investors “sewage” and told him to divest after the investor expressed concern about Better going public via a SPAC merger, which involves combining with a blank check company, as opposed to a traditional initial public offering.
Better, which had been set to go public before the end of the year, had delayed its planned SPAC merger before the company layoffs. According to people familiar with the matter who spoke with Bloomberg, the delay was because the company had revised the terms of its merger.
Better is backed by investors including SoftBank, Novator Partners, Activant Capital, and others.
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