The CEO of a US firm has been heavily criticised after he fired about 900 of his staff on a Zoom call.
The nine hundred employees at The digital mortgage company Better.com received an unwanted early Christmas gift of unemployment. The termination announcement was made during a short Zoom call by the founder and CEO, Vishal Garg.
Garg cited reasons behind the firing as market efficiency, performance and productivity. Among those fired were the diversity, equity and inclusion recruiting team.
The layoffs are said to have happened primarily in the US and India. The company has over 2,000 employees in India, mostly in Gurgaon.
The firing comes a week after the Softbank-backed lender received $750 million in cash. Better.com has raised over $400 million in equity capital since its inception and is valued at $7 billion. Its investors include Kleiner Perkins, Goldman Sachs, American Express Ventures, Citi, among others.
The sacked employees will receive a month of severance pay, a month of full benefits, and two months of cover-up during which Better.com will pay the premium.
Comments being passed on social media said the termination at this time in the run up to Christmas was too “cold”, “harsh” and “a horrible move”.
The CEO, in firing his staff made the following announcement:
“Hi everyone, thank you for joining. I come to you with not great news. The market has changed, as you know, and we have to move with it in order to survive so that hopefully we can continue to thrive and deliver on our mission.
“This isn’t news that you’re going to want to hear but ultimately it was my decision and I wanted you to hear it from me. It’s been a really, really challenging decision to make. This is the second time in my career that I’m doing this and I do not want to do this. The last time I did it I cried. This time I hope to be stronger. But we are laying off about 15% of the company for [a number of] reasons: the market, efficiency and performances and productivity.
“If you’re on this call you are part of the unlucky group that is being laid off. Your employment here is terminated. Effective immediately.”
Better.com and what it does
Better.com works on “improving house mortgaging” and financing by allowing people to apply for loans and financing online, instead going directly to banks. The company claims to offer loans at fixed and adjustable rates for conventional and jumbo loans for several types of homes without charging any commission.
Started in 2014, the company has expanded its footprint rapidly, having merge with different companies during the process. For example, in 2015, the founders partnered with Avex Funding, a California originator specializing in prime conforming and jumbo mortgages for over 10 years.
The company changed its name to Better Mortgage in 2016 and got $30 million in Series A funding. The company again approved as a Fannie Mae seller or servicer. A year later, the company again raised $15 million in Series B funding with Kleiner Perkins Caufield Byers, while in 2019, the company raised $160 million in Series C funding.
The firings also came around when the company having raised $750 million in fresh capital from two of its backers, Aurora Acquisition Corporation and SoftBank. The company also plans to go public by the Special Purpose Acquisition Company (SPAC) route soon.