Don’t Fire 900 Employees in 3 Minutes on Zoom

What comes to mind when contemplating that doozy of an internal communication story from last week? We're referring to the one where a mortgage company CEO invited hundreds of employees to attend a webinar on Zoom. On the three-minute webinar, he tells them 'You're terminated.'

Employees of tech start-up were watching the webinar when CEO Vishal Garg announced on-screen that 900 of them would lose their jobs. That's about 15 percent of staff.

"If you're on this call, you are part of the unlucky group that is being laid off," Garg said. "Your employment here is terminated effective immediately."

Fired staff will receive one month's salary and three months of benefits, Garg said during the webinar.

Forbes reported the story late Friday (Dec. 3). CNN Business did so yesterday morning (Dec. 6). Social media reaction was heated.

DEI Gone

Included in the unfortunate terminated group was the company's DEI recruiting team, CNN Business says. Its head, Ivori Johnson, confirmed that detail on LinkedIn. She said all affected employees "were logged out of [company-issued] computers before we were notified."

During the webinar, Garg said, "This is the second time in my career I'm doing this, and I do not want to do this. The last time I did it, I cried." Garg employed a few empathetic words, yet his tone was cold. CNN Business described the webinar as "short and emotionless." You can see it here. [Alert: There's harsh language in the added audio track.]

Later, CFO Kevin Ryan attempted to soften the message.

"Having to conduct layoffs is gut wrenching, especially this time of year," Ryan said in a statement to CNN Business. Yet the company's leaders wanted a strong, or "fortress, balance sheet" and a smaller, "focused" workforce going into 2022, Ryan added.

Bad Facts

The story continues to spiral. Last Friday night, Forbes confirmed Garg berated terminated employees with messages on "an anonymous professional network" called Blind.

“You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking in 8 hours-plus a day in the payroll system?” one of the messages reads.  “They were stealing from you and stealing from our customers who pay the bills that pay our bills...."

So, what was it? Did he balance sheet require terminating 900 staff? Or was it because 250 employees were not working a full day? And what about the other 650 employees? Garg mentioned "performance" and "productivity" during the webinar as reasons for termination. He provided no specifics.

Ironically, the company is flush with cash. In May, went public through a SPAC, CNN Business reports. During the first week of December, it took in a $750 million cash payment from the deal. Better's balance sheet seems strong, with company valued in the billions.

Another bad fact: Garg reportedly made a companywide phone call after the webinar. During the call, Forbes reports, Garg said he should have terminated the employees "three months ago." In addition, he warned remaining staff "their productivity was being eyed."

It's not a surprise that is facing an internal communication issue, possibly a crisis.

[Update, Dec. 7, 6pm ET: A trio of senior executives reportedly resigned in the wake of the firing story. They included the chiefs of PR and communication, respectively and the CMO.]

[Update, Dec. 8, 6pm ET: Garg issued an apology for his conduct. Though he promised to change his way, the missive lacked specifics.]

[Update, Dec. 10, 1pm ET: Better's board said it's assessing its leadership and culture in light of last week's "regrettable events." In addition, the board said CEO Garg is taking time off. Accounts are emerging that Garg's behavior was unprofessional well before his fated Zoom firing call. One wonders, Where was the board during Garg's pattern of unacceptable conduct?]

Internal Communication...Again

Prior to the pandemic, internal communication often was a forgotten part of PR. While for some companies internal communication emerged from its slumber during the pandemic, it remains somewhat of an outlier. For example, even companies that employ PR firms tend to handle internal communication in-house.

Indeed, in the forthcoming edition of Onclusive's annual "The State of PR," a question about PR firms' most useful services excludes internal communication as a choice. The PR service chosen most (28 percent of respondents) was strategic counsel and advice. Next was storytelling, content marketing and copywriting, crisis management and reputation management.

Onclusive will release the report formally Thursday (Dec. 9).

Similarly, a new report from HarrisX/Ragan Communications found just 1 percent of communication leaders consider their most important role speaking to employees or shareholders. The top role, they said, is protecting the company's reputation.

Relaying Difficult News

As part of their remit, PR pros sometimes need to think of the best ways to communicate bad news, such as mass job terminations.

Says kglobal managing director Daniel Rene, "The only way to communicate bad news is directly, authentically and with sincere empathy." He adds that those relaying the message should "have an understanding of and an appreciation for how the news will impact others." If not, they are "ill-prepared to share anything negative."

Similarly, Jack Kalavritinos, founder and principal at JK Strategies, emphasizes communicating job losses with compassion and respect.

"Be factual about why the action is being taken and use details about next steps for employees," he adds. Moreover, have several internal professionals and executives review messaging "and make sure it adheres to those keys."

The Disconnect

Apart from the example, it seems internal communication still needs work. About one month ago, Axios HQ, an internal communication vendor, issued disturbing survey data. It showed 70 percent of communicators believe they understand what internal communication content employees need to receive. Just 31 percent of employees agreed.

Seth Arenstein is editor of PRNEWS and Crisis Insider. Follow him: @skarenstein