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'We probably pissed away $200 million,' Better.com CEO told employees in layoffs meeting

·4 min read
Fintech investors appear to be favoring later-stage deals as sector takes a hit, recent data shows

When Better.com CEO Vishal Garg laid off 900 employees, or about 9% of the company’s staff, in early December, the startup world was shocked by his callous delivery.

Now a video of Garg and CFO Kevin Ryan addressing the remaining employees right after the chief executive performed those layoffs has emerged, confirming many reports of his brash style and harsh words about those affected.

In a video obtained by TechCrunch, Garg is seen addressing the layoffs and admitting to making a number of mistakes.

We chose not to publish the video in an effort to protect the identity of the source, but we’ve picked out the most relevant bits based on a transcription of the 12-minute meeting here:

About two minutes into the meeting, Garg said: “Make no mistake, we did also eliminate redundant roles — who might be strong performers but were in the wrong place at the wrong time, with the wrong task, and weren't mission-critical.”

After about four minutes, Garg also acknowledged that the company was continuing to hire, including some interns, in the midst of the layoffs, while at the time making a thinly veiled threat: "... It's because we expect those people to be super productive and add value, and if they don't we will exit them, too.”

He added:

"We are going to be leaner, meaner and hungrier going forward. We will not be spending time trying to raise capital. We will not be spending time focused on what investors think. We will be spending time grinding this business forward in what will likely be a bloodbath in the mortgage industry in the next year or two."

In the video at around the eight-minute mark, Garg admitted to not being disciplined in managing the company’s cash and in its hiring strategy, which helps explain the company’s second mass layoff of over 3,000 people just three months later. It also helps support multiple sources’ claims that the company is currently “losing $50 million per month.”

"Today we acknowledge that we overhired, and hired the wrong people. And in doing that we failed. I failed. I was not disciplined over the past 18 months. We made $250 million last year, and you know what, we probably pissed away $200 million. We probably could have made more money last year and been leaner, meaner and hungrier."

He also explicitly said that the company lost $100 million in the previous quarter, saying it was his “mistake” for not laying off staff earlier.

"We should’ve done what we did today three months ago … that’s what I’m saying to you right now, it’s what I’ve said to the board before. …You will not be allowed to fail twice. You’ll be encouraged to fail once, but not allowed to fail twice.”

At the end of the video, Ryan takes over and addresses the employees

“There will be people who say that raising a lot of money and reducing headcount all in the same week are inconsistent — how could you do that? Well we think they're entirely consistent. As Vishal said, thousands of startups start every year, thousands of startups fail every year. As a management team, we are always going to do what puts the company in the best place possible and that's having a very strong balance sheet and a lean business that's on the path to profitability. So this is all about offense, it's darkest before the dawn, 2022 comes and it will be a lot of carnage in this industry and we're going to capitalize — lean, mean, and now is our opportunity to grow and to grow even faster than we've been growing. So while this is hard, we'll get through this, this too shall pass, and on to 2022."

The video reveals what many former employees have described: leadership that comes across as arrogant in its approach, expressing a cutthroat attitude when it comes to layoffs, and admitting to mismanagement of financial and human capital.

When reached, an unnamed Better.com spokesperson did not dispute the authenticity of the recording or the CEO's remarks and declined several times to provide their name for this story.