Nine-hundred employees at the digital mortgage company Better.com have received an unwanted early Christmas gift: unemployment. The termination announcement was made during a now-viral Zoom call by the company's founder and CEO, Vishal Garg.
Employees on the call said in total the announcement lasted about three minutes, during which Mr Garg explained why he was terminating the "unlucky group" of employees, "effective immediately."
"This is the second time in my career I'm doing this and I do not want to do this. The last time I did it, I cried," Mr Garg, 43, said during the call.
The terminated 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.
Mr Garg's decision to fire 900 people just before Christmas was met with swift backlash across social media platforms when a video of the call was leaked online by an employee who recorded the meeting.
The CEO earned further ire after it was revealed that the mass termination happened a day after the company – which announced in May it would go public sometime near the turn of the year – would receive a $750m cash infusion from its SPAC backers.
While layoffs are an unfortunate reality for countless companies, Mr Garg also has a history of insulting his employees and has been the subject of numerous fraud and financial misappropriation allegations at his previous companies.
Mr Garg moved from India to Queens, New York with his family when he was seven years old. During a podcast interview in 2019, Mr Garg claimed his fascination with business started during high school, when he would purchase CliffNotes and other books to re-sell to his classmates at a markup.
He then claims he moved into reselling thrift store clothes on eBay – a claim that is almost certainly incorrect, as eBay was founded after he left high school – before enrolling at New York University. He studied finance and international business.
In 2000, Mr Garg and his high school friend and fellow immigrant, Raza Khan, began a private student loan company called MyRichUncle. The site separated itself from other lenders by using algorithms to determine the borrowing terms for interested students.
By 2007, Mr Garg had dropped out of NYU, and the pair's company had gone public, becoming one of the largest private student loan companies in the US. The company was eventually purchased by Merrill Lycnh, and later by Bank of America.
Two years later the financial crisis hit, and MyRichUncle found itself forced into Chapter 7 bankruptcy.
Despite the setback, the duo saw opportunity and launched a new project, called EIFC, which used the same technology MyRichUncle used to determine borrowing terms to allow homeowners to identify loans that should have never been approved by the banks. That information could provide them with the tools needed to sue their banks that issued the predatory loans.
By 2013, however, things between the pair turned sour, with Mr Khan filing a lawsuit claiming that Mr Garg – who oversaw the company's finances – had not been filing the business' taxes and that Mr Garg had transferred $3m from the company's coffers into his personal bank accounts.
The relationship between Mr Garg and his former friend became uglier, with Mr Garg claiming that Mr Khan stole $400,000 – an allegation Mr Khan has denied – and resulting in a deposition during which Mr Garg threatened to "staple [Mr Khan] against a f****** wall and burn him alive."
Mr Garg later apologised for the comments, but has since called Mr Khan a "total charlatan who used to be my best friend."
A year after Mr Khan filed the lawsuit, Mr Garg founded Better.com, which provides digital mortgage services for prospective homeowners. The company has long been touted as one of the hottest fintech startups of recent years, but by 2019 allegations of financial mismanagement began circulating among the company's employees.
According to The Daily Beast, employees claimed that Mr Garg had been hanging over huge amounts of equity to one of his top lieutenants, Elana Knoller, in the form of stock options and a monthly $8,000 payment a month for two homes, among other perks. Those benefits did not appear consistent with what other top officers were receiving at the company.
“It’s crazy," a former senior employee told the outlet. “It’s like a handout. The whole point of options is to incentivize four years of work. This is like handing her cash.”
Ms Knoller left the company four months after the allegations began circulating. She had been placed on administrative leave for allegedly bullying workers, according to Forbes.
More recently Mr Garg has faced criticism for his treatment of employees. Forbes reported on a leaked email in which the CEO called his employees "a bunch of DUMB DOLPHINS" who were going to be eaten by sharks, saying they were "TOO DAMN SLOW."
Following the mass termination, Mr Garg – posting anonymously on the social network Blind – accused his former staff of being "lazy and unproductive."
"You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking 8 hours+ a day in the payroll system?" he wrote. "They were stealing from you and stealing from our customers who pay the bills that pay our bills."
Mr Garg confirmed to Fortune that he is the person who wrote the post, saying: “I think they could have been phrased differently, but honestly the sentiment is there.”
The Independent has reached out to Mr Garg and Better.com for comment.
Despite the bad press, Better.com's implied valuation ahead of its arrival on the markets is $6.9bn.
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