The CEO who fired 900 people on Zoom just before Christmas wants his job back
Vishal Garg believes he has been misled.
The recently fired CEO of Better Home & Finance claimed of Daniel Lewis, who took his place last week, “He hoodwinked me.” He expressed his approval of the company’s approach. He gained our trust by praising us on X and using it to join our board.
Garg, who gained notoriety for firing 900 people Zoom employes shortly before the 2021 holiday season, claims he was let go on August 3, just as he was bringing the business to the brink of success.
Over the past few years, Better has endured a lot under Garg’s leadership. The corporation was valued at $8 billion during the pandemic-driven refinancing boom, when mortgage rates were below 3%. The AI mortgage company’s market value is currently only $300 million due to the collapsed refi industry and rates that are getting closer to 7%.
Include a leave of absence following the humiliating Zoom layoff incident, a whistleblower lawsuit that was dismissed, a Securities and Exchange Commission inquiry that resulted in nothing, a disastrous 2023 SPAC acquisition that caused the company’s shares to plummet 93%, and years of increasing losses. The fact that Garg remained CEO for this long is a small miracle.
However, Garg claims he was on the verge of completing the company’s improbable turnaround.
Better’s yearly sales fell from $1.5 billion in 2021 to $70 million in 2023 as its main refinancing business failed. According to him, the business is expected to generate $200 million in sales this year.
It recovered by teaching AI models to process mortgages rapidly, which would often take several days for dozens of people to complete. According to Garg, it collaborated with Neo Home Loans, which quadrupled production and cut loan origination expenses by 50%. This year, Intuit, Coinbase, and OpenAI joined together with Better to power their mortgage services after being impressed with the outcomes. Additionally, the corporation established a robust home equity line of credit business.
“We’re succeeding. The volume of loans has tripled. We’re almost profitable,” Garg remarked. “After taking the ball all the way down the field from the other side, we were at the five-yard line.
Garg admits that he is “hard-nosed” and that the well-known Zoom layoffs seriously harmed the company’s brand; he is aware that this error will follow him forever. Even if Garg has come under fire for making nearly unachievable demands of the business and its workers, he claimed Lewis persuaded the board that he didn’t exert enough pressure.
A request for comment was not answered by Better or Lewis. “There was never a $BETR without @vishal_better,” Lewis wrote on X on August 4. Respect is required for that.
‘It’s not about me’
Six months ago, Lewis, a hedge fund manager with a mixed record of performance, came to Garg with proposals for cost reductions and profitable delivery, according to Garg.
Lewis’s ideas regarding cost-cutting were sound. Garg contended that his notions of innovation weren’t. “When we’re this close, it’s so much easier for someone to come in and say that they could have done better.
On July 27, Lewis joined the board. After a week, he persuaded the other directors to remove Garg from his position as CEO and appoint himself.
Garg remarked, “It’s not about me.” “Delivering savings and assisting people in realizing the American Dream are important to me. I therefore obliged with the stockholders’ request to “take a back seat.
However, Garg claims that despite Lewis’s advice and persuasion to provide him a board position, he hasn’t been open about his intentions for the past few months.
“I think he’s always wanted to be CEO,” Garg remarked. “The board erred.
Investors seem to concur with Garg. Since Lewis became CEO, the stock has dropped 45%. (Prior to the announcement of Garg’s departure, the stock had dropped more than 16% this year.)
Garg claims that several appalled investors contacted him in the week following his resignation (albeit he stayed on the board) to beg him to reclaim his position as CEO. Garg claims he has the votes to win because he possesses Class B shares with special voting rights, both his own and those of a group of devoted early investors.
He has hired powerful attorney Alex Spiro, a partner at Quinn Emanuel, to represent him, and on Monday he filed a letter to the board requesting his reinstatement as CEO. He promises to work for $1 a year until the business is profitable, at which point he will step down from his position as CEO.
Garg remarked, “It’s an admission that I’ve been doing this for ten years, but execution hasn’t been perfect fired 900 people.” “I hope it’s resolved. I believe that Better’s future is still quite promising.