Better.com CEO Vishal Garg is “taking time off effective immediately” following his controversial decision to lay off about 900 employees, or approximately 9% of the online mortgage lending company’s staff, over a Zoom call.
According to an email from Better’s board of directors obtained by Vice News, chief financial officer Kevin Ryan will manage the company’s day-to-day operations in Garg’s absence and report directly to the board. In addition, the board is engaging with an independent third-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,” the email continues. “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.”
A representative for Better.com did not immediately return FOX Business’ request for comment.
In the Zoom call, which was posted on YouTube, TikTok and Twitter, Garg told employees that the “market has changed” and that Better.com has to “move with it in order to survive.” In addition to market conditions, Garg cited efficiency, performances and productivity as reasons for the layoffs.
“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,” he told employees. “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.”
The 43-year-old, who has been critical of his staff in the past, according to Fortune, revealed to the outlet that he was the author behind an anonymous blog post on professional networking site Blind Network after the Zoom call, accusing some impacted employees of stealing or working an average of 2 hours per day.
Several top executives have reportedly resigned due to the controversy, including Better.com head of marketing Melanie Hahn, head of public relations Tanya Hayre Gillogley and vice president of communications Patrick Lenihan.
Following employee backlash to the way the layoffs were handled, Garg issued an apology, saying he “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,” his email states. “I realize that the way I communicated this news made a difficult situation worse. I am deeply sorry and am committed to learning from this situation and doing more to be the leader that you expect me to be.”
The controversy comes as Better.com previously announced plans in May to go public through a merger with special purpose acquisition company Aurora Acquisition Corp., which gives the company an implied equity value of approximately $6.9 billion and a post-money equity value of approximately $7.7 billion.
On Nov. 30, the companies announced they were delaying the listing to seek regulatory approval for a revised agreement and are working towards completion of the merger in a “timely manner.”
Under the new terms, Better.com will receive a $1.5 billion private investment in public equity from SoftBank subsidiary SB Management Limited and Aurora’s sponsor, Novator Capital, comprised of a $750 million bridge financing that will be received immediately and an additional $750 million convertible note. The new terms were announced prior to the Zoom call firing.
From its founding in 2016 through mid-2021, Better funded over $45 billion in home loans and provided over $25 billion in cumulative coverage through its insurance divisions, Better Cover and Better Settlement Services. The company has raised over $400 million in equity capital since its inception.