Better.com CEO to return after mass firing backlash

Yahoo Finance Live's Akiko Fujita and Brad Smith discuss Better.com CEO Vishal Garg returning to work after backlash from firing 9% of the workforce over Zoom.

Video Transcript

AKIKO FUJITA: Welcome back to Yahoo Finance Live. Well, here's a story that is sure to get a lot of employees riled up again. The former CEO of Better.com, Vishal Garg, who became infamous, as you'll recall, Brad, for firing 900 employees over Zoom back in December, is reportedly coming back. In a letter that was reportedly sent to employees, the company's board of directors says Garg is returning to his full-time duties after using his absence to reflect on his leadership, reconnect with values that make better great, and work closely with an executive coach.

Brad, I'm curious to get your take on this. Because, as you'll recall, back in December when this happened. I mean, there was so much outrage not just within the company but outside who said, look, this is just not the way to lay off employees-- 9% of your workforce in one Zoom call.

BRAD SMITH: Yeah, I believe the broader sentiment from anybody who read this story across social was just cringe. When you think about the amount of different Zoom meetings that many of us had been going through over the course of the pandemic, and then for everybody who had made it to that point into December, and to have that really kind of-- that non-aware or at least tone deaf approach, we should say, to understanding how this could be received not only by employees, but also by clients at the end of the day too, and customers who use the services of Better.com.

And so it's also kind of coming with this broader fabric of what they were gearing up for, especially considering that there were reports-- and at the time, they were looking to go public. And so that is something that we've seen in the past where companies are super cost conscious going into any type of public debut, whether it be a SPAC, or direct listing, or anything of the like. But again, just super cringe at the time when it happened, and we'll see, you know, what's changed in this leadership strategy in his return now to the company.

AKIKO FUJITA: Yeah. And it's worth noting that they've pushed off that listing since. And I think you're right when you use the word, tone deaf. Regardless of what was happening internally, you know, the argument here is that that's just not the way to do it.

And what we're hearing now is that Garg reportedly sent a letter to employees-- so it wasn't just the board of directors. He sent a letter to employees as well and apologized for the angst, distraction, and embarrassment that his actions caused. By the way, it wasn't just about the Zoom call.

He also later accused employees of stealing from former colleagues and customers because they were unproductive. And he said they were only working about two hours a day. So a lot of damage control here. I'd be curious to see how much of the culture he can-- or how much of the employees he can rally around him, because that's certainly, increasingly-- a big part of employee sticking around is the company culture. And if you've got somebody at the top who is now known for taking these kind of actions, it's going to be a steep hurdle.

BRAD SMITH: Right, it's an extremely competitive talent market right now. So retention is extremely key for this company.

AKIKO FUJITA: Yeah. Yeah, I think a lot of employees have a little more leverage, maybe, once he steps back into that CEO role.

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