In the past four months, digital mortgage lender Better.com has gone through mass layoffs not once, but twice. The company has also seriously botched a mass layoff not once, but twice.
First, on December 1, Better.com fired about 900 employees over a Zoom video call that eventually went viral. It was not the first company to lay off people through Zoom during a global pandemic. But it was the way it was treated that offended so many.
CEO and co-founder Vishal Garg was universally criticized for being cold and numb in his approach. He made matters worse by publicly accusing affected employees of “stealing” from their colleagues and customers by being unproductive days later.
Besides, only one day before, CFO Kevin Ryan emailed employees saying the company would have $1 billion in its balance sheet by the end of that week. In the weeks following the firings, Garg “apologised” and took a month-long “break”, employees told how he was “led by fear” and a number of senior executives and two board members resigned.
Then, on March 8, the company fired an estimated 3,000 of its remaining 8,000 employees in the US and India and “accidentally rolled out severance payments too early”. Many employees reported finding out initially by seeing a departure check in their Workday accounts — the payroll software the company uses. When executives realized their mistake, those employees said, they deleted the checks from some people’s Workday accounts. According to an affected employee who wished to remain anonymous, the departure checks came in without any additional communication from the company.
Looking back on these two layoffs, it’s clear we can all agree on one thing: Better.com could have handled both incidents better. Clearly, layoffs are difficult regardless of the circumstances, but sometimes necessary — especially in times like these, when we once again see startups considering layoffs as a way to control cash consumption and raise new capital. We spoke to a trio of HR experts who offered advice on how to make a layoff less painful for everyone involved.
“This is an example for all businesses of what not to do,” said Lisa Calick, director of HR Advisory Services at Wiss & Company, of how Better.com is handling the situation. “Communication surrounding involuntary terminations should always be treated with tact, respect and consideration for those affected.”
This post Better.com teaches us how not to downsize a company – TechCrunch was original published at “https://techcrunch.com/2022/04/03/better-com-teaches-us-how-not-to-conduct-mass-layoffs/”