Better.com CEO Vishal Garg. Photo / Better.com
The CEO of a mortgage start-up who fired 900 employees in a three-minute Zoom call last week is "taking time off effective immediately".
Better.com boss Vishal Garg, 43, has come under intense scrutiny after recordings of the meeting were posted online and picked up by media outlets globally.
The company's board of directors sent an email to staff on Friday (Saturday NZT) saying that Garg was stepping away, Vice reported.
The board also said it had hired an outside firm to "do a leadership and cultural assessment".
"Vishal will be taking time off effective immediately," the email says. "During this interim period Kevin Ryan as CFO will be managing the day-to-day decisions of the company and he will be reporting to the Board.
"As well, the Board has engaged an independent 3rd party firm to do a leadership and cultural assessment. The recommendations of this assessment will be taken into account to build a long-term sustainable and positive culture at Better.
"We have much work to do and we hope that everyone can refocus on our customers and support each other to continue to build a great company and a company we can be proud of."
Garg abruptly announced the company was sacking about 9 per cent of its workforce during a webinar on Wednesday last week.
"I come to you with not great news," he said ahead of the video call.
"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.
"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.
Vishal Garg: “I wish I didn’t have to lay off 900 of you over a zoom call but I’m gonna lay y’all off right before the holidays lmfaooo”https://t.co/6bxPGTemEG
— litquidity (@litcapital) December 5, 2021
"This isn't news that you're going to want to hear. But ultimately it was my decision.
"And I wanted you to hear from me. It's been a really, really challenging decision to make."
One unhappy worker who filmed the call can be heard saying on the footage: "F*** you dude. Are you f***ing kidding me?"
Among those fired was the company's diversity, equity and inclusion recruiting team.
After the video was published online, Garg accused hundreds of the now-redundant employees of "stealing" from their colleagues and customers by being unproductive.
In a series of messages seen by Fortune, the scathing CEO wrote: "You guys know that at least 250 of the people terminated were working an average of two hours a day while clocking eight hours+ a day in the payroll system?
"They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated."
The company, which received a US$1 billion cash injection last week, is valued at nearly US$11.4b.
After Garg's brutal Zoom call went viral, the list of indiscretions against the mortgage boss quickly grew.
An article from Forbes dated back to November 2020 revealed the CEO's history of questionable emails, while uncovering multiple ongoing lawsuits regarding allegations of improper and even fraudulent activity made against Garg and his entities.
In a 2013 lawsuit, Raza Khan – Garg's former business partner and university friend – accused him of transferring $4.42m from their software company to his personal bank account and then using stolen technology to build Better.com.
Although Garg has contested these claims, court documents showed emotional explosions between Garg and Khan, with the CEO telling Khan he was "going to staple him against a f**ing wall and burn him alive". This incident occurred after Garg retaliated and accused Khan of stealing $420,000 from him, which Khan also denied.
Garg later apologised for the threatening comments.
Another set of leaked emails published by Forbes show messages from Garg in which he said employees needed to "break" a title insurance partner – which is similar to lender's mortgage insurance some Kiwi buyers are required to purchase – in order to get a better deal for customers.
"You need to press your [partner] to the point of breaking, then break them. Break them," it read.
"Punish them. Punish them like they just stole candy from your little sister. And until you fight for the consumer, you aren't getting my love."
Another set of emails also show Garg calling his team members "a bunch of dumb dolphins".
"DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME," it read.
An investigation by the Daily Beast also uncovered an incident in which an executive was hired at Better.com so Garg could avoid face-to-face confrontations.
While she was placed on administrative leave earlier this year over allegations of bullying, she was accused of creating "a culture of intimidation and retaliation".
Despite this, she received at least US$8400 per month for two homes plus additional perks like stock which was potentially worth tens of millions.
Speaking to the Daily Beast, one ex-senior employer said it was "crazy" that she was essentially rewarded for her behaviour.
"It's like a handout. The whole point of options is to incentivise four years of work. This is like handing her cash," they said.