'No way to lead' | 'Callous' boss sacks 900 staff on ZOOM CALL weeks before Christmas

'Callous' boss sacks 900 staff on ZOOM CALL weeks before Christmas

A boss has come under fire after sacking around 900 members of staff at once during a Zoom call, just weeks before Christmas, the BBC has reported.

Vishal Garg, the chief of US based mortgages firm Better.com, told shocked staff that they were “part of the unlucky group” having their employment terminated immediately, following news that the firm was struggling financially and needed to cut around 15% of its workforce.

During the call, Garg told staff: "The market has changed, as you know, and we have to move with it in order to survive so that hopefully we can continue to thrive and deliver on our mission.

"This isn't news that you're going to want to hear but ultimately it was my decision and I wanted you to hear it from me. It's been a really, really challenging decision to make. This is the second time in my career that 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. But we are laying off about 15% of the company for [a number of] reasons: the market, efficiency and performances and productivity.

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"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."

Better.com had recruited high numbers of staff during the pandemic. But Garg has since reportedly told his remaining staff that the firm “overhired and hired the wrong people”.

Better.com's Chief Finance Officer, Kevin Ryan, told the BBC: "Having to conduct layoffs is gut-wrenching, especially this time of year."

He added, however, that having "a fortress balance sheet and a reduced and focused workforce" was necessary to take on the "radically evolving homeownership market".

‘Quite callous’

Garg’s decision to let go of so many staff via a video call has been criticised by many.

Ann Francke, Chief Executive of the UK's Chartered Management Institute, criticised the way in which the staff were fired.

“Bad managers will fire people badly whether virtually or in person," she told the BBC's Today programme.

"But the callous manner in which this was conducted was just magnified by the fact that it was done in this sort of virtual and quite callous style.

"What we know in the pandemic is that empathy matters."

She added: "This is a customer-facing business, they are trying to provide people with mortgages. I'm sure many customers or potential customers are thinking: 'Gee whizz, if they treat their employees this way I wonder how they treat their customers?'."

Is it legal?

Gemma Dale, Lecturer in employment law and business studies at Liverpool John Moores University in the UK, told the BBC that, although within the law in America, sacking so many employees in this manner would be illegal in the UK. She added that the actions were "no way to lead an organisation".
"Just because you can do this in America, doesn't mean you should," Dale said.

"There are ways to do these things which, even in difficult conditions, are empathetic and decent."

Additionally, Chris Deeley, Employment Solicitor at JMW Solicitors, said: “While it might be legally acceptable in the United States, this approach to business restructuring would certainly not be permissible here in the UK, where the rules around redundancy process (and dismissals more generally) are considerably more stringent.

“Even notwithstanding the legal position, employers finding themselves in such a situation should also ensure they act with caution and compassion, to avoid further alienating retained staff or indeed customers.”

Jack Harrington, employment partner at Pannone Corporate commented: “The manner in which Vishal Garg dismissed 900 employees in a single Zoom call is both extreme and lacks a huge amount of empathy and tact – particularly in the current climate and so close to Christmas.

“While virtual meetings have undoubtedly grown in prominence during the course of the pandemic, they should never be used in this way to dismiss hundreds of people in one fell swoop. This may be permissible in the United States, but UK employers would expose themselves to the risk of considerable claims if they attempted something so ill-conceived.

“There’s no doubt that a significant number of businesses are continuing to struggle in the face of COVID-19 and that the restructuring of workforces, including redundancies, remains a distinct possibility. However, employers need to think very carefully about how they carry out such changes and ensure they’re following due process. This usually includes having a valid reason for dismissing someone; following a fair procedure, including consulting with employee representatives, holding a formal meeting with the affected person, or people; communicating the outcome of the meeting to each individual; and ensuring the employee or employees are aware of their right to appeal.

“The laws in the US may differ from those in this country, but either way, the actions of Better.com leave a lot to be desired when it comes to the management of people.”

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