CEO Who Laid Off Workers over Zoom Will Return to Company

Kathy Gurchiek By Kathy Gurchiek January 24, 2022
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CEO Who Laid Off Workers over Zoom Will Return to Company

​Vishal Garg, the CEO and founder of mortgage company Better.com who sparked a backlash among its employees and the public when he laid off 900 employees over a Zoom call, will be returning to the organization he founded.

He was put on immediate leave for his actions—which included insulting the workers he sent packing and alleging at least 250 of them stole from the company by working only two hours a day. Several top executives resigned shortly after the call. Garg later apologized to the remaining employees for his mishandling of the layoffs, acknowledging that he "blundered" in how he delivered the news.

Better.com employees learned of Garg's return in an e-mail the company's board of directors sent Jan. 18, according to various news accounts. In its missive, the board noted it had conducted a "thorough, independent" review of its culture, The New York Times reported. The result will be an expansion of company leadership by recruiting a new board chairman, president and chief human resources officer.

Some additional measures the company also announced include a training program on building "a respectful workplace" and a new ethics and compliance committee that will report directly to the board.

Garg apologized to employees again in a separate letter Jan. 18 for the embarrassment and distraction his actions caused and said he would be more conscious of how his words impact people, The Wall Street Journal reported.

SHRM Online collected the following news reports on Garg's return, what happens when a CEO falls from grace and how taking time for reflection can lead to better leadership. 

Better.com CEO Who Fired 900 Workers on Zoom Call Reinstalled

Better's board of directors informed the workforce that it had met with Garg multiple times and that it was confident Garg could continue to lead the company. 

Garg took a break from his full-time duties "to reflect on his leadership, reconnect with the values that make Better great and work closely with an executive coach," the board wrote in its e-mail. After discussions with Garg, "direct input from the independent culture review, and the announcement of the organizational changes above, Vishal will be resuming his full-time duties as CEO."

(Forbes

Better.com Zoom Firing Fallout—Lessons to Learn

To HR industry veteran Amy Spurling, CEO and founder of HR software company Compt, neither the choice of Zoom to deliver the news nor the timing so close to the holidays yielded the main cautionary tale.

Rather, it's the evidence of low productivity at the company that lays bare the true corporate fault line, Spurling said.

"That is a problem and letting those people go does not solve the problem. What you have is a management structure issue," she said. Even if the assessment of low productivity was correct, why were whole corporate teams let go? Was everyone on those teams working a mere two hours a day?

If productivity is an issue—even at lower levels than Garg's estimates—it points to a far greater flaw in the culture that should be immediately addressed, according to the HR expert.

(Mortgage Professional America

Harshly Handled Layoff Underscores Important Lessons for Leaders

Employers can learn what not to do from the actions of Garg, who came under fire for what has been called his harsh, insensitive layoff of 900 employees during a Dec. 1 Zoom call.

When planning a layoff, remember to treat employees with respect. Be honest and fair, and inform them of support resources, such as an employee assistance program or the availability of therapists or pastoral care. Also, consider the timing of the news and any incentive packages needed to carry employees for a few months.

(SHRM Online

The Rewards of CEO Reflection

Deep thought and reflection are casualties of a high-pressure and high-stakes environment as CEOs rush from event to event and decision to decision. Downtime is often regarded as wasted time.

CEOs who do make time to reflect, however, say that it is time well spent, and Boston Consulting Group said its research on CEO success validates that view. Reflection leads to better insights into innovation, strategy and execution. Reflection gives rise to better outcomes and higher credibility with corporate boards, leadership teams, workforces and other stakeholders.

(Boston Consulting Group)

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