Vishal Garg, the CEO and founder of financial tech company Better who made headlines for firing 900 employees on a company Zoom call shortly before Christmas, has now been let go and replaced, according to a report.
Garg removed, replaced by hedge fund manager
Garg was reportedly fired from Better on August 3, according to CNN, before hedge fund manager Daniel Lewis was named as the company's interim CEO. Lewis joined the company's board only a week prior, the report states.
Garg told CNN he felt tricked by the move. 'He said he liked the company's strategy. He praised us on X and used that to get on our board and win our confidences,' he claimed.
Company setbacks and Garg's defense
The company saw numerous setbacks under Garg, including being flooded with negative reviews following the mass layoffs. Sales dropped from $1.5 billion in 2021 to $70 million in 2023, though Garg said Better was on target to deliver $200 million in sales this year.
'We're winning. We've tripled loan volume. We're close to profitability,' he said. 'We were at the 5-yard line after taking the ball all the way down the field from the other side.'
Garg said that he felt Lewis had convinced the company's board to fire him, saying: 'It's not about me. I care about delivering savings to people and helping them live the American Dream. So when shareholders said, "You need to take a back seat," I complied.' He added: 'I suspect he always wanted to become CEO. The board made a mistake.'
Garg demands reinstatement, company files complaint
The former CEO sent a letter to the board on Monday demanding that he be reinstated, and has retained a lawyer. Garg has reportedly claimed he will work for $1 a year until Better returns to profitability, at which point he says he will leave the role as CEO.
'It's an acknowledgement that I've been doing this for 10 years, but execution hasn't been perfect,' he continued. 'I hope it gets resolved. I think the future still remains very bright for Better.'
In a complaint filed on Tuesday in the US Southern District of New York, Better alleges Garg violated two federal securities laws by 'cultivating a coalition of shareholders' and 'flooding the market with misleading statements' to reinstate himself as CEO. Forbes reports that, according to the complaint, the company's board voted unanimously to remove Garg as CEO citing net losses exceeding $1.5 billion since 2022 and a more than 90% plunge in stock price.
Background of the Zoom layoffs
Garg came under scrutiny five years ago when, during a Zoom call, he fired 900 people 'effective immediately.' 'This is the second time in my career I'm doing this and I do not want to do this. The last time I did it, I cried,' he said during the call, which was recorded by an employee. The CEO said the cuts to the $7 billion US company's workforce were needed to avert financial disaster.
He later wrote in a blog post: '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.'
Garg — who once threatened to burn an ex-business partner alive, according to court papers — admitted his blog post 'could have been phrased differently.' Garg, who founded Better in 2016, was told to take a leave of absence after the layoffs, before being reinstated.
