When they were invited for a Zoom meeting with the CEO Vishal Garg, none of the nine hundred employees of the $ 7 billion online mortgage company Better.com was prepared for what was to come. It was a brief meeting and in a terse address to them, the CEO announced the sack of all 900 of them at a go.
“I come to you with not great news,” he said. “The market has changed, as you know, and we have to move with it in order to survive. 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.”
He expressed the hope that the people concerned would be “more successful, more fortunate, and luckier in your next endeavour.”
“The last time I did this, I cried. This time, I hope to be stronger. 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. Get educated,” he added.
Coming less than a month before Christmas, the layoff affected 15% of the company’s workforce.
When the recording of the proceedings went viral on social media, it sparked outrage within the company and in the online community.
One Twitter user wrote: “How selfish can he be?”. Another said, “And reasons like this is why you’ll see more people become start up entrepreneurs and not work for anyone.”
Is anything wrong in an employer firing staff that he believes are no longer relevant to his goals and objectives? Absolutely not! It happens every day. So, why the outrage against the CEO of Better.com? The problem is with the cold nonchalance and insensitivity with which it was done. The approach is largely viewed as esteeming statistics above people.
Perhaps due to backlashes from investors or an epiphany moment when he suddenly woke up to realize that people are the blood of the organization, Garg gave a public apology to the employees for the brusque, jarring way he handled the matter of their disengagement. In another statement he issued a few days later, Vishal Garg wrote, “I want to apologize for the way I handled the layoffs last week. I failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better,” he wrote.
While upholding “the decision to do the layoffs”, he admitted that he could have executed it better. In his words, “I realize that the way I communicated this news made a difficult situation worse. I am deeply sorry and am committed to learning from this situation and doing more to be the leader that you expect me to be.”
He has since announced his decision to step away from his duties for some time, perhaps to give room for further reflection and introspection.
The Vishal Garg approach to employee disengagement is typical of leaders and companies that do not recognize that the first customers of any business are the people who work there. People built the online company to become the multi-billion-dollar company that it became. Machines, processes and structures in themselves don’t build companies. People do! Sustainable business success must therefore Prioritize people. A company succeeds not only because of the brilliance of leadership but because of its leaders’ capacity to make people the very soul of its operations. No matter how modernized a system or process is, it is only as successful as the people who operate it. The first public and perhaps the most fundamentally important are the employees of the company who make it possible for the company to run a process that delivers products to a purchasing public; and which in turn delivers dividends to shareholders. If you treat your employees like royalty, you will not sacrifice them for the bottom-line! The most resilient companies are those who have learnt that when challenges occur, firing people should not be the first line of response. What great companies do is to stretch the capacity of the people and make them part of its redemption process. Properly done, the people themselves will brainstorm and come up with suggestions on moving forward and turning the negative tide into profitable turnarounds. Many of them would be willing to accept pay cuts and some will even offer to resign and return when things are better! When people know that they matter and that they are vital stakeholders in the corporate outcomes, they will work like they own the business. Even when things are difficult, they are not eager to jump ship and seek better alternatives. Loyalty is a two-way street.
The next letter in the acronym P.E.O.P.L.E is ‘E’ which stands for Empathize. Sustainably successful enterprise runs more on the “heart” than the “head”. While the head drives vision and strategies which produce systems, structures and processes, the heart builds the people who will run the structures and systems built. Systems, structures and processes are set up to serve people. Without people, structures collapse.
The leader’s ability to connect with the emotions of his followers will determine how they interpret his actions. The people that work with us are flesh and blood with feelings, desires, personal hang-ups and frustrations, just like us. They have family, friends and people that look up to them for material, social or emotional support.
Staff strength has little to do with statistics. It is about esteeming people for the value that they bring on board. Even if it is eventually proven that they are undeserving of the trust reposed in their office, there are ways to disengage people in a way that makes them see the need to without any hard feelings. Maturity in leadership is about knowing that we can disagree without being disagreeable! Each of the 900 people that Vishal fired was employed based on certain perceived strengths, not their weaknesses. Each of them has a family or are members of one with expectations for a happy Christmas celebration. Some would have made plans on what to give their family and friends for Christmas. Firing them just before they were able to realize these lofty intentions was nothing short of disregard for their feelings, self-esteem and the esteem of their families. Obviously, he failed to walk where they walked. Employees, like external customers, have concerns, ideals, perceptions and expectations which they expect that their employer to factor into consideration in dealing with them on any issue. Never take people’s feelings for granted or assume that they don’t have feelings. When it is obvious that the company only values them for their talent and not their person, they simply begin to work for a paycheck rather than a vision. This is one lesson that Vishal failed to learn before making his rude and shocking announcement. That failure led to his loss of face inside and outside the organization. By the time he returns from his temporary break, it is hoped that he would have learnt his lesson!… continued.
Remember, the sky is not your limit, God is!
