Better.com Zoom firing fallout – the lessons to learn

Industry veteran gives her assessment of the debacle

Better.com Zoom firing fallout – the lessons to learn

It’s a rather unanimous shared sentiment at this point to say the mass firing of some 900 workers at Better.com could’ve gone, well, better. Yet some see the impersonal method of firing -- via Zoom and mere weeks from Christmas, mind you – less egregious than what the entire spectacle revealed about the company’s management.

Read more: CEO announces 100s of layoffs in bizarre Zoom call

To HR industry veteran Amy Spurling, CEO and founder of award-winning HR software company Compt, neither the choice of Zoom to deliver the bad news nor the timing so close to the holidays yielded the main cautionary tale. “With so many companies going remote, letting people go on Zooms is going to happen,” she said, given the video platform’s de facto status as a communication portal amid pandemic. “To his credit, he delivered the message as a CEO rather than have his lieutenants do the dirty work.”

As for the timing just ahead of the holidays: “New budgeting cycles start in January,” Spurling observed, noting mass exits usually come the month before. “But it’s about as cruel as you can be to employees,” she acknowledged. “There was a severance package,” she added. While she’d advise companies to fire people in January if possible – if only to avoid a PR fiasco “…from the humanitarian standpoint,” she noted, -- mass firings ahead of the holidays are unusual given budget cycles. “It seems pretty nasty, but it’s not uncommon.”

Rather, it’s the very evidence of low productivity at the company -- deemed a “unicorn” by Forbes magazine -- that lays bare the true corporate fault line, Spurling said in a telephone interview. “That is a problem and letting those people go does not solve the problem. What you have is a management structure issue.”

That’s assuming Garg’s claims are accurate, Spurling suggested. But even if the assessment of low productivity was on the money, why were whole corporate teams let go? To a person on each affected team, was everyone working a mere two hours a day? “Now there were entire teams that were let go, so I question if it really was about productivity,” Spurling said.

But if productivity is an issue (even at lower levels than Garg’s estimates), it points to a far greater flaw in the culture that should be immediately addressed, the HR expert said. “You’re not managing to the right outcome,” Spurling said. “If you think productivity is a problem look at management structure first rather than looking at employees first,” she added. “Make them accountable and give them achievable goals.”

But in the next breath, Spurling wondered aloud what the real story might be behind the scenes. “There’s more to the story of what’s going on at that company. You can’t claim to be dedicated to building an inclusive and diverse workplace and then unceremoniously cut the entire DE&I [diversity, equity and inclusion] team on a group call.”

Read next: Digital mortgage lender Better lays off 900 staff

Mortgage Professional America attempted to reach the company’s head of public relations, Tanya Hayre Gillogley, for answers. A voice mail message was dutifully delivered to her phone mail box, but it’s unlikely she’ll return it. According to the New York Post, she joined another pair of executives in resigning following the Zoom-firing backlash.

According to her LinkedIn profile, Gillogley had been head of PR at Better.com since January 2019. Ironically, it was just two months ago she had posted a rosy assessment of working at the firm. “So PUMPED to work at Better, who was just named LinkedIn’s No. 1 start-up of 2021 – the only company to get this award TWO years in a row!”

Those expecting a corporate comeuppance in the wake of Better.com’s Grinch-like moves will likely be disappointed. The day before the layoffs were announced, Better.com secured some $750 million in cash as part of an amended deal with investors, as TechCrunch reported. All told, the company reportedly has a valuation of $7 billion ahead of going public. Such fat cash reserves are sure to remain unaffected by the firing controversy.

Spurling said one potential pitfall after the ensuing PR nightmare that has emerged is that fewer job seekers in a hot labor market would gravitate to the firm, which might inhibit growth, which may turn off future investors seeking brisk expansion.

But it’s all just conjecture. For better or for worse, Spurling suggested, the company will remain an industry darling from the investment standpoint. “Some venture capitalists just don’t care,” she said. “Investors are looking for payback. What could be limiting is the ability to raise money if you can’t grow. Then, you can’t live up to expectations.”

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