CEO of US tech company lays off 900 employees over Zoom call that “lacks empathy”

Source: Unsplash/Lucas Law

The chief executive of US unicorn is in hot water after laying off some 900 employees over a Zoom call.

The mass termination was filmed, presumably by a now-former employee, and shared on TikTok and Twitter.

“If you’re on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately,” Vishal Garg, founder and chief of the online mortgage lender, says in the video.

He says this amounts to about 15% of the workforce. A statement from chief financial officer Kevin Ryan, however, reportedly put that number at 9%.

Garg puts the layoffs down to a changing market, and the need for the business to adapt in order to “continue to thrive and deliver on our mission”.

“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. This time, I hope to be stronger.”

A Twitter user sharing the video notes that the founder is “making it all about himself”, while delivering devastating news ahead of the holiday season.

In the background of the video, the employee can be heard saying: “Fuck you, dude. Are you fucking kidding me?”

In response to a request for comment, Ryan said having to conduct layoffs is “gut wrenching, especially at this time of year”.

However he referenced a “fortress balance sheet” and said a reduced and focused workforce will “set us up to play offense”.

It’s worth noting that the business raised US$500 million ($709 million) in April this year. According to TechCrunch, the round, led by SoftBank Vision Fund, valued at US$6 billion ($8.5 billion).

How to deliver bad news better is hardly the first company to have to make tough decisions around staffing, particularly since the onset of the COVID-19 pandemic.

The mass shift to remote work also means many other leaders will have had to have difficult conversations remotely.

Garg’s very public methodology, however, highlights exactly how not to do it.

Hareta McMullin, people coach and founder of Third Space, tells SmartCompany having to make redundancies is not a problem in itself. But the way they’re handled can make a big difference.

“Anyone watching this video likely had a pit in their stomach.”

Delivering any redundancy news ‘en mass’ will not be successful, McMullin adds.

“It lacks empathy.

“Whether you’re making one or 100 people redundant, everyone deserves to have the time invested in a one-to-one conversation, ideally with their manager and an HR team member.”

Garg could have used the call to inform employees there will be a review and a process, she says, allowing affected employees to get their heads around what could be to come.

His posture and language also gave the impression he was unprepared, she notes, “and that he was the victim in this scenario”. Needless to say, that is not the way to get people on side.

For leaders facing difficult conversations in a remote-first world, the key is to approach the situation from a human-centric perspective and with empathy, McMullin says. It’s also important to tailor the process to the individual as much as possible.

“As tough as your job is, the situation isn’t about you, it’s about the employee,” she says.

“If you adopt this mindset, everything else will fall into place.”


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