Leaked video from a second meeting that Better.com held minutes after the now-infamous Zoom call in December, when it terminated 900 employees, provides stunning new insight into the level of mismanagement that went into perhaps the most bungled corporate downsizing in recent memory.
Before the holidays, footage of CEO Vishal Garg stoically informing 10% of Better’s workforce that “If you’re on this call, you are part of the unlucky group that is being laid off” drew massive backlash and easily became one of the most-watched Zoom calls since “I’m Not a Cat.”
Now Fast Company has obtained video of the town hall meeting that Better convened immediately afterward, when remaining employees learned what Garg had just done. The video, which has not been previously released, shows five executives watching—some more uncomfortably than others—as their CEO spends 10 minutes inconsistently shifting blame for the layoffs between marketplace forces, his own overspending, and the perceived underperformance of the employees themselves.
At one point, Garg argues that he squandered $200 million, but also faults Better’s business partners, including its title-insurance provider (“weak and doesn’t pride itself on customer service”) and its home-insurance companies (“been doing business the same way for hundreds of years, and inflict that same pain on our customers”). Finally, he warns Better’s remaining 8,000 employees that “we will exit them too” if they aren’t “super productive.”
The video footage runs about 12 minutes, through the end of the meeting. Fast Company is only sharing the audio, along with a still frame, in order to protect the identity of sources familiar with the call.
Reached for comment, a Better spokesperson sent the following statement:
“Following a thorough review of our culture by outside experts, we have taken significant steps related to our executive leadership structure, governance and workplace practices to ensure that Better’s culture and operations reflect our values and that we always maintain an environment of fairness, respect, transparency and care for every member of our team. We are moving forward laser-focused on our mission to make homeownership simpler, faster and more accessible for everyone.”
Reports in December had mentioned this followup Zoom call, and at the time, several of Garg’s lines even appeared in stories. Employees who attended this meeting, livestreamed from Better’s World Trade Center offices at 9:30 a.m. on December 1, tell Fast Company Garg’s words felt “threatening” and made them uncomfortable.
The recording also includes brief statements from CFO Kevin Ryan and former senior VP of customer service, sales, and operations Sarah Pierce, who left in February.
“Today, we acknowledge that we over hired and hired the wrong people—and in doing that, we failed,” Garg begins. “I was not disciplined over the past 18 months. We made $250 million last year, and you know what? We probably pissed away $200 million. We probably could have made more money last year.” He says Better lost $100 million in the previous quarter, and “should have done what we did today three months ago.”
He adds he’s already found time to explain all this to Better’s board and to Masayoshi Son of SoftBank, Better’s top backer. The Zoom layoffs blindsided workers, yet this suggests Better took all the time it needed preparing for them.
Once public backlash began, Garg’s instinct was to double down and accuse ex-employees of “stealing” company time. Here, however, he confesses that the terminations weren’t quite so targeted.
“To the extent possible, we’ve cut under-performers,” he explains in the call. “But make no mistake about it—we did also eliminate redundant roles, we also did eliminate folks who might be strong performers but were just in the wrong place at the wrong time with the wrong task, and weren’t mission-critical to taking the rocket ship forward.”
Next, Garg announces it’s time to update the company “from Better 1.0, the DVD era, to Better 2.0, with our public offering, our over a billion and half dollars of capital, our leaner, meaner, hungrier workforce.”
He assures the remaining workforce: “We will not be spending time trying to raise capital. We will not be spending time focused on what investors think. We will be spending time grinding this business forward in what will likely be a bloodbath in the mortgage industry.” This word choice, of course, came minutes after he sprung mass layoffs on almost a thousand unsuspecting employees.
Garg ends the Zoom meeting with a kick in the pants to the remaining employees. “If you felt in the past that people weren’t looking, well, everyone is looking now,” he warns, before saying all of their jobs are about to get harder. Expect that “One hundred and ten percent of my time is going to be spent in the office making sure we’re being as productive as possible,” he says, and leaves everyone with two final warnings: “Not meeting deadlines will not be accepted” and “You will not be allowed to fail twice.”
Of course, the December 1 mishaps were just the start of Better’s blunders. In March, after Garg took a hiatus to “reflect on his leadership,” and after other top executives resigned, Better proceeded to terminate over 3,000 more employees without notice, including a number of expectant parents. This despite having described these very employees as “mission critical” just three months earlier.
For now anyway, enthusiasm for Better’s highly anticipated IPO has cooled. But a new leak that puts Better’s level of mismanagement into fuller context could give investors that committed billions to the fintech company—SoftBank, L Catterton, Novator Partners, American Express Ventures, Ally Bank—buyer’s remorse.
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This post has been updated with a response from Better.