The CEO of Better.com has taken leave “effective immediately” after firing over 900 employees on a Zoom call with no warning and later accusing some of stealing time. The mortgage company’s Founder and CEO Vishal Garg sent a memo stating he was “taking time off effective immediately,” according to Insider.
The story went viral last week and continues to dominate headlines – but it has fueled the debate about working remotely and led some to question how productive employees can actually be with remote work from home.
It all started on Wednesday, December 1, when employees attended what they thought was a typical Zoom call with Garg.
“This is the second time in my career I’m doing this and I do not – do not want to do this,” Garg said to his employees. “The last time I did it, I cried. This time I hope to be stronger, but we are laying off about 15 percent of the company for a number of reasons. … 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.”
Employees were blindsided. One could be heard incredulously saying “F**k you dude” in the background his recording of the call, which has since been shared widely on social media.
Backlash immediately ensued.
“Spineless CEO, firing 900 people via a video call. He’s expecting the rest of the staff to pick up the slack because HIS bonus wasn’t as big as last year. F**k him and never use Better . com,” one Twitter user wrote.
Another took issue with the fact that the diversity and inclusion team was in the group of fired employees. “Companies in 2020: ‘We are so committed to DEI and antiracism.’ 2021: ‘Among those fired were the diversity, equity and inclusion recruiting team,’” Twitter user @kat_stafford wrote.
However, Garg defended his decision on a networking site called Blind. Under the username “uneducated,” the founder said hundreds of the employees who were fired had been stealing time, according to Fortune, who also reported Garg confirmed he was the person behind the Blind account.
“You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking in 8 hours+ a day in the payroll system?” Garg wrote. “They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated.”
When questioned about his statements, Garg originally stood by them. “I think they could have been phrased differently, but honestly the sentiment is there,” Garg said.
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He was supported publicly in the decision by his company’s Chief Financial Officer Kevin Ryan. “Having to conduct layoffs is gut wrenching, especially this time of year,” Ryan said in a statement to CNN Business. “However a fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market.”
Garg was doing damage control by this week and attempting to make amends by apologizing for how he handled the layoffs.
“I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better. I own the decision to do the layoffs, but in communicating it I blundered the execution. In doing so, I embarrassed you,” Garg said in a leaked email.
Still, some people wondered if the firings were justified. “IF it’s true employees were working an average of 2 hours/day and being paid for 8, then they deserve to be fired, no matter how much investment $ came in,” @dugood_silence wrote. “A company is only as good as it’s employees. If you’re not doing your job, you get canned. It’s not a charity.”
A February study by Joblist suggested Garg’s assessment may be true. In a Forbes article about the study, it says results show “the average worker said they spent an average of nine hours a week doing other tasks instead of working.”
Activities like cooking, doing laundry, playing with kids, watching TV, online shopping, exercising, etc. accounted for some of the things they spend their time on. “On average, employees indicated it was acceptable to be away from their computers for 23 minutes at a time without letting someone know what they were doing,” Forbes reported.
The same study showed it didn’t mean people were less productive. “Many people are more productive when they’re relaxed and free from pressure,” Forbes reported. “Traditionally, experts have stressed the importance of balance, time cushions and taking breaks at the office. Taking breaks, eating throughout the day and asking questions about new technology can help to minimize stress and maximize productivity.”
Results from a research study published by the University of Chicago that tracked over 30,000 U.S. workers ages 20-64 from May 2020 to March 2021 showed “nearly six out of 10 workers reported being more productive working from home than they expected to be, compared with 14 percent who said they got less done.”
Factors such as eliminating commutes to the office, getting more sleep and the ability to focus without chatty colleagues were cited by workers for increased productivity. Some workers also reported an increase in hours and a slight decrease in productivity.
“Total hours worked during that time increased by approximately 30 percent, including an 18 percent rise in working beyond normal business hours, the researchers find. At the same time, however, average output—as measured by the company through setting work goals and tracking progress toward them—declined slightly,” according to the University of Chicago. “Time spent on coordination activities and meetings also increased, while uninterrupted work hours shrank.”