Vishal Garg is returning to his “full-time duties” as CEO, according to a letter sent to employees Tuesday from the company’s board of directors. The letter noted that Garg used a leave of absence to “reflect on his leadership, reconnect with the values that make Better great and work closely with an executive coach.”
The online mortgage company’s letter to employees, which was obtained by CNN Business, also said an outside law firm reviewed Better’s workplace culture and is implementing changes, including adding more managers and a chief human resources officer.
In December 2021, Garg held a video call in which he laid off 9% of Better’s workforce. “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.”
The CEO had promised a follow-up email from HR — but one affected employee told CNN Business he immediately lost access to his company computer, phone, email and messaging including Slack channels.
Garg was took a leave of absence soon after the call. At the time, Better said it was hiring a third-party firm to do a “leadership and cultural assessment,” whose recommendations “will be taken into account to build a long-term sustainable and positive culture at Better.”
‘Angst, distraction and embarrassment’
In his own letter to employees Tuesday, Garg wrote that “I understand how hard these past few weeks have been. I am deeply sorry for the angst, distraction and embarrassment my actions have caused. I’ve spent a lot of time thinking about where we are as a company and the type of leadership Better needs…and the leader I want to be.”
It’s a tonal departure from a post that he wrote a few weeks ago on the professional network Blind, in which he accused the fired employees of “stealing” from their colleagues and customers by being unproductive and only working two hours a day, according to Fortune, which confirmed those sentiments in a later interview with the CEO.
Garg had previously apologized for how he handled the layoffs, however, in a December 7 letter to employees in which he said he “a difficult situation worse.”
He added: “I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better. I own the decision to do the layoffs, but in communicating it I blundered the execution. In doing so, I embarrassed you.”
Better.com is valued at $6.9 billion, earning it so-called unicorn status. The company ranked No. 1 on LinkedIn’s Top Startups list in 2021 and 2020. The Softbank-backed mortgage lender has been trying to go public, although it has delayed those plans because of the fallout from Garg’s handling of the layoffs, according to Bloomberg.
The board’s letter Tuesday also said Raj Date and Dinesh Chopra had resigned from the board, and that “while we do not comment on individuals’ determinations to leave the board, Raj and Dinesh did not resign because of any disagreement with Better.”
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The CEO who fired 900 employees over Zoom is coming back
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Photo Credit: Ursula Page / Shutterstock
One of the major economic stories in recent months has been rising concerns about inflation. While year-over-year wage growth in the U.S. has reached its fastest rate in decades this year, the benefit of rising wages for most households has been limited by increasing prices in many consumer categories. The U.S. Bureau of Labor Statistics has been reporting price increases in excess of 5–6%, figures well above typical levels. Recent increases in the CPI primarily came from increases in the cost of energy, transportation, food, and shelter.
The latter category tends to be a major pressure on household incomes. Housing is the largest regular expenditure for most households, so the failure of wages to keep up with housing prices can make housing costs even more expensive in real dollars. And over the last year and a half, housing prices have skyrocketed, with the cost of homes sold in the U.S. increasing by more than 18% over the last year.
While recent economic conditions have caused greater alarm, the gap between the rates of growth for incomes and home prices is not a new phenomenon. The rate of growth of median income has lagged behind that of home prices for at least the last two decades. From 2000 to 2020, the median income in the U.S. increased by 61%, from $41,990 to $67,521, while the median home price nearly doubled—a 96% increase—from $127,569 to $249,497, according to data from the U.S. Census Bureau and Zillow.
Shutterstock
Photo Credit: Ursula Page / Shutterstock
One of the major economic stories in recent months has been rising concerns about inflation. While year-over-year wage growth in the U.S. has reached its fastest rate in decades this year, the benefit of rising wages for most households has been limited by increasing prices in many consumer categories. The U.S. Bureau of Labor Statistics has been reporting price increases in excess of 5–6%, figures well above typical levels. Recent increases in the CPI primarily came from increases in the cost of energy, transportation, food, and shelter.
The latter category tends to be a major pressure on household incomes. Housing is the largest regular expenditure for most households, so the failure of wages to keep up with housing prices can make housing costs even more expensive in real dollars. And over the last year and a half, housing prices have skyrocketed, with the cost of homes sold in the U.S. increasing by more than 18% over the last year.
While recent economic conditions have caused greater alarm, the gap between the rates of growth for incomes and home prices is not a new phenomenon. The rate of growth of median income has lagged behind that of home prices for at least the last two decades. From 2000 to 2020, the median income in the U.S. increased by 61%, from $41,990 to $67,521, while the median home price nearly doubled—a 96% increase—from $127,569 to $249,497, according to data from the U.S. Census Bureau and Zillow.
The CEO who fired 900 employees over Zoom is coming back
The gap between wage growth and home price growth may be most severely felt in areas where home prices are increasing the fastest. States in the West have shown the most rapid increases in housing costs in recent years, led by Idaho, where the median home price is up by 110% just over the last five years. Other fast-growing Western states like Utah, Arizona, Washington, and Nevada have also seen rapid home price increases over that span.
The gap between wage growth and home price growth may be most severely felt in areas where home prices are increasing the fastest. States in the West have shown the most rapid increases in housing costs in recent years, led by Idaho, where the median home price is up by 110% just over the last five years. Other fast-growing Western states like Utah, Arizona, Washington, and Nevada have also seen rapid home price increases over that span.
The CEO who fired 900 employees over Zoom is coming back
Many of these Western states are now among the national leaders in home price-to-income ratio. The ratio of median home price to median income is one indicator for housing affordability. Nationally, that ratio is 4.7, but the top 10 states—nine of which are found in the West—currently have ratios of 6.3 or greater. The top states are Hawaii (9.4) and California (8.9), two of the states with the highest home prices and long-running issues with affordable housing. And at the local level, some California metros exhibit even starker ratios, with the top five most expensive large metros in the U.S. all being located in the Golden State.
Many of these Western states are now among the national leaders in home price-to-income ratio. The ratio of median home price to median income is one indicator for housing affordability. Nationally, that ratio is 4.7, but the top 10 states—nine of which are found in the West—currently have ratios of 6.3 or greater. The top states are Hawaii (9.4) and California (8.9), two of the states with the highest home prices and long-running issues with affordable housing. And at the local level, some California metros exhibit even starker ratios, with the top five most expensive large metros in the U.S. all being located in the Golden State.
The CEO who fired 900 employees over Zoom is coming back
Data on household income and spending are from the U.S. Census Bureau and median home values are from Zillow. To identify cities with the highest and lowest home price-to-income ratios, researchers at Construction Coverage divided the Zillow Home Value Index by median household income in each location. Researchers also calculated the five-year change in home price.
Here are the U.S. cities with the highest price-to-income ratios.
Data on household income and spending are from the U.S. Census Bureau and median home values are from Zillow. To identify cities with the highest and lowest home price-to-income ratios, researchers at Construction Coverage divided the Zillow Home Value Index by median household income in each location. Researchers also calculated the five-year change in home price.
Here are the U.S. cities with the highest price-to-income ratios.
