Vishal Garg, the CEO and founder of financial tech company Better, who made headlines for firing 900 employees on a company Zoom call shortly before Christmas in 2021, has now been let go and replaced. Garg was fired from Better on August 3, according to CNN, and hedge fund manager Daniel Lewis was named as the company's interim CEO. Lewis joined Better's board only a week prior to Garg's dismissal.
Garg Claims He Was Tricked by New CEO
Garg told CNN that he feels tricked by the move. 'He said he liked the company's strategy. He praised us on X and used that to get on our board and win our confidences,' Garg claimed, referring to Lewis. Garg said that he felt Lewis had convinced the company's board to fire him, stating: 'It's not about me. I care about delivering savings to people and helping them live the American Dream. So when shareholders said, “You need to take a back seat,” I complied.' He added: 'I suspect he always wanted to become CEO. The board made a mistake.'
Company's Financial Struggles and Garg's Defense
Better faced numerous setbacks under Garg, including being flooded with negative reviews following the mass layoffs. Sales dropped from $1.5 billion in 2021 to $70 million in 2023, though Garg said Better was on target to deliver $200 million in sales this year. 'We're winning. We've tripled loan volume. We're close to profitability,' he said. 'We were at the 5-yard line after taking the ball all the way down the field from the other side.'
The former CEO sent a letter to the board on Monday demanding that he be reinstated, and has retained a lawyer. Garg has reportedly claimed he will work for $1 a year until Better returns to profitability, at which point he says he will leave the role as CEO. 'It's an acknowledgement that I've been doing this for 10 years, but execution hasn't been perfect,' he continued. 'I hope it gets resolved. I think the future still remains very bright for Better.'
Better Files Complaint Against Garg
In a complaint filed on Tuesday in the US Southern District of New York, Better alleges Garg violated two federal securities laws by 'cultivating a coalition of shareholders' and 'flooding the market with misleading statements' to reinstate himself as CEO. Forbes reports that, according to the complaint, the company's board voted unanimously to remove Garg as CEO citing net losses exceeding $1.5 billion since 2022 and a more than 90% plunge in stock price.
Background of the 2021 Zoom Layoffs
Garg came under scrutiny five years ago when, during a Zoom call, he fired 900 people 'effective immediately.' '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,' he said during the call, which was recorded by an employee. The CEO said the cuts to the $7 billion US company's workforce were needed to avert financial disaster. He later wrote in a blog post: 'You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking 8 hours+ a day in the payroll system? They were stealing from you and stealing from our customers who pay the bills that pay our bills.'
Garg — who once threatened to burn an ex-business partner alive, according to court papers — admitted his blog post 'could have been phrased differently.' Garg, who founded Better in 2016, was told to take a leave of absence after the layoffs, before being reinstated. The company's CFO Kevin Ryan told CNN at the time: 'Having to conduct layoffs is gut-wrenching, especially this time of year. However, a fortress balance sheet and a reduced and focused workforce together set us up to play offence going into a radically evolving homeownership market.'
