In the past four months, digital mortgage provider Better.com has not once, but twice carried out a mass layoff. The company also badly screwed up a mass layoff not once, but twice.
First, on Dec. 1, Better.com laid off about 900 employees over a Zoom video call that went viral. It was hardly the first company to fire employees over Zoom during a global pandemic. But it was the way it was handled that offended so many.
CEO and co-founder Vishal Garg was widely criticized for being cold and callous in his approach. He also insulted the violation by publicly accusing the affected workers days later of “stealing” their colleagues and customers by being unproductive.
Additionally, just a day earlier, CFO Kevin Ryan emailed employees saying the company would have $1 billion on its balance sheet by the end of this week. In the weeks following the layoffs, Garg “apologized” and went on a month-long “hiatus”, staff explained how he “led through fear” and a number of executives and two board members resigned.
Then, on March 8, the company laid off an estimated 3,000 of its remaining 8,000 employees in the US and India and “accidentally released the severance pay statements early.” Many workers reported that they first found out about this through a severance check in their Workday accounts — the payroll software the company uses. When executives realized their mistake, these employees said, they deleted the checks from some people’s Workday accounts. According to an affected employee, who asked to remain anonymous, the severance checks came without further communication from the company.
Looking back at those two layoffs, it’s clear that we can probably all agree on one thing: Better.com could have handled both incidents better. Obviously, layoffs are difficult under any circumstance, but sometimes necessary — especially at times like these, when we’re again seeing startups consider layoffs to control cash burn and attract new capital. We spoke to a trio of HR professionals who offered some advice on how to make a layoff less painful for everyone involved.
“This is an example of what not to do for any company,” said Lisa Calick, head of HR Advisory Services at Wiss & Company, of Better.com’s handling of the situation. “Communication about involuntary terminations should always be handled with sensitivity, respect and consideration for the individuals involved.”