On 8 December 2021, Vishal Garg, Chief Executive of US mortgage firm Better.com, called a meeting with 900 of his staff. A recording of the zoom call which has now gone viral shows Garg stating as follows:
“Hi everyone, thank you for joining. I come to you with not great news. 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.
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.”
Understandably there has been a lot of backlash and the actions of Garg have been branded “cold”, “harsh” and “a horrible move”, especially in the run up to Christmas.
In the wake of the incident, it is reported that the head of marketing Melanie Hahn, head of public relations Tanya Hayre Gillogley and vice president of communications Patrick Lenihan for Better.com are all reported to have tendered their resignations.
It is a difficult climate for many business owners and sometimes cutbacks are necessary but “…how they go about it and the humanity they approach it with can have a fundamental impact on how people deal with that shocking news” explains Rachel Suff, senior policy adviser on employee relations at the Chartered Institute of Personnel and Development.
The situation facing Better.com’s staff in the US would not happen in the UK where a mass-firing like this would be illegal.
In the UK, Employers have to follow a process involving consultation meetings with employees or employee representatives. There are also minimum set consultation periods where there 20 or more redundancies being made:
- 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect
- 100 or more redundancies – the consultation must start at least 45 days before any dismissals take effect
UK employers also have to look for alternative roles for workers. Rachel Suff explains “An employer really needs to tell people that they’ve exhausted every possible alternative, it is the last thing they wanted to do – it is about being able to leave with your dignity and respect intact.”
If you have any queries on how to carry out a redundancy process or need any help with planning a restructure, do not hesitate to get in touch and speak to a member of the team 03332005153 or contact us through our online form here.