Better.com CEO Apologizes for Layoffs, SPAC Delayed

Better.com CEO Vishal Garg Issues Apology Following Layoff Controversy

Vishal Garg, the CEO of Better.com, has seemingly acknowledged wrongdoing in the recent handling of company layoffs.

The acknowledgment comes amidst substantial negative attention surrounding the situation.

A letter addressed to current employees was leaked on the Blind platform by a verified Better.com employee. In this communication, Garg expressed regret for the manner in which the layoff announcements were delivered last week, stating: “I did not demonstrate the appropriate level of respect and gratitude towards those impacted and for their contributions to Better. I take responsibility for the decision to implement the layoffs, however, the way in which it was communicated was a misstep. This resulted in embarrassment for you all.”

Impact on Company Personnel

Some observers suggest that Garg’s actions also reflected poorly on his own professional standing.

Reports indicate that the company’s diversity & inclusion team was among those affected by the workforce reduction.

Earlier today, sources with knowledge of internal company affairs informed TechCrunch that Patrick Lenihan, VP of communications; Tanya Gillogley, head of public relations; and Melanie Hahn, head of marketing, have all tendered their resignations.

Insider also corroborated this news earlier in the day.

The Layoff Fallout

The repercussions stemming from CEO and co-founder Vishal Garg’s management of the layoffs, impacting approximately 900 employees, have been significant.

Criticism has focused on the method of delivery – via Zoom – and perceptions of insincerity on Garg’s part.

The video of the layoffs has even become a viral meme on TikTok, with widespread condemnation of Garg’s conduct.

This action followed an announcement that the digital mortgage lender had secured a $750 million cash infusion as part of an amendment to its SPAC agreement with Aurora Acquisition Corp., a blank check company, and SoftBank. Subsequently, roughly 9% of the 10,000-person workforce was let go. The company anticipates going public with a $6.9 billion valuation.

SPAC Delay and Further Departures

Bloomberg reported today that the company is now, predictably, postponing its SPAC, which was initially slated to finalize in the fourth quarter of this year.

TechCrunch has contacted Better.com for a statement but has not received a response as of this writing.

The employees reportedly resigning have also not yet responded to requests for comment.

Better.com is not alone among SoftBank-backed proptech companies experiencing executive departures ahead of a public offering.

In 2019, Insider reported that over a dozen of WeWork’s senior leaders had left the company amidst internal disputes and uncertainty surrounding its IPO plans.

Future Outlook

A central question now is whether investors and board members will accept this behavior from Garg, or if he will be compelled to leave the company, similar to Adam Neumann.

Garg’s reputation for being a difficult person dates back to last year, when Forbes published the contents of an email he sent to employees: “HELLO — WAKE UP BETTER TEAM. You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and…DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME.”

The same Forbes article also revealed that Garg was involved in several lawsuits filed by entities such as PIMCO and Goldman Sachs, alleging “improper and even fraudulent activity at two previous business ventures, and the misappropriation of “tens of millions of dollars.”

Market Conditions and Hiring History

A decline in refinancing activity is believed to be a contributing factor in Better.com’s decision to reduce its workforce.

In April 2020, Better.com announced it was “aggressively hiring” as more individuals sought to refinance their homes due to historically low mortgage rates.

At that time, I reported for Crunchbase News that an internal memo from Garg to employees indicated the mortgage lending startup was planning to add approximately 1,000 employees throughout 2020, anticipating increased demand from homeowners.