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Better.com's employee layoff by Zoom gets HR thumbs down

Better.com's mass layoff by Zoom was seen as a big miss by HR professionals, who say the CEO's approach lacked empathy and planning.

Vishal Garg, CEO at Better.com, a mortgage lending firm, started his Zoom call with ominous words and a somber tone. Its employee layoff tactic has since been saved on video and launched into social media infamy. 

"I come to you with not great news," Garg said during last week's virtual gathering. "The market has changed." 

Better.com's employee layoff Zoom call was a shock to employees, but it was just as much a shock for some HR professionals who watched it. They said it lacked empathy and planning, and Garg has since acknowledged missteps.

"I blundered the execution," he said in a note posted Tuesday on the firm's website. "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."

Lacking in empathy, planning

Garg's self-assessment of his performance was accurate, according to interviews with HR professionals.

Deb Muller, CEO at HR Acuity LLC, gave the video a grade: "F," she said.

Before Garg delivered the employee layoff news, he told his employees how difficult this was for him. "The last time I did it, I cried," he said. "This time, I hope to be stronger." 

Vishal Garg, CEO at Better.com, during a Zoom meeting
Better.com CEO Vishal Garg, pictured during a Zoom meeting to lay off employees at Better.com.

He then announced the layoffs, which he put at 15% and reportedly affects 900 workers.

"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," Garg said. A person recording the Zoom session by video had an audible, pained reaction. That video from last Wednesday then went viral on TikTok and social media platforms.

"Nothing about it was done properly," Muller said. He "totally lacked empathy," and, in addition "to it being really disingenuous, it was all about him," she said, pointing to his reference at how upset he was in announcing earlier layoffs in his career. HR Acuity is an employee relations and investigations management provider based in Florham Park, N.J. 

Muller said a different approach was needed. "You have to really explain why the company is taking these steps, what steps they've done to avoid doing it, how people were selected, the process, and then what's going to happen to the people," she said.

David Lewis, president and CEO at OperationsInc, an HR consulting firm in Norwalk, Conn., agreed. "I don't think it was handled particularly well," he said. But Better.com was also stuck with a problem: It couldn't bring people together at one or more locations and had to leverage electronic tools to get its message out. 

The misses here were massive.
David LewisPresident and CEO, OperationsInc

"Doing this in a group fashion, as awful as it is, often is the choice of the lesser of many evils," Lewis said. He said that a more gradual, personal approach would have created workplace issues as people waited to find out if they were getting laid off.

But "the misses here were massive," Lewis said. You need a well-choreographed script, your emotions out of it and apologies off the table, he said. 

Patrick Thibodeau covers HCM and ERP technologies for TechTarget. He's worked for more than two decades as an enterprise IT reporter.

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