Listen to the dismissal of a CEO to 900 employees by Zoom 1:42
New York (CNN Business) -
Christian Chapman, a former Better.com insurer, thought he was logging onto another of CEO Vishal Garg's Zoom forums.
He didn't know it would be his last call as an employee of the online mortgage company.
"If you are on this call, you are part of the unfortunate group that is being laid off," Garg said in a one-way webinar last Wednesday, which lasted three minutes.
Garg started immediately and did not wait for the workers to arrive at the meeting.
"Your employment here is terminated with immediate effect."
Dismissal in Zoom
The call ended abruptly, leaving the insurer dumbfounded.
Chapman, who is the sole provider for his 7-member family, was used to his boss's outbursts, but this was unexpected.
Chapman began messaging on the company's Slack channels asking what was happening when their screens went dark: He lost access to his company's computer, phone, email, and messaging.
He used Facebook Messenger to communicate with his colleagues.
Garg had promised a follow-up email from Human Resources, but they had previously terminated employee access.
Chapman finally received the communication through his personal email hours later.
"It was a surreal moment. It was one of those things that you don't think is going to happen," Chapman said.
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A lot of money
The company laid off 900 employees at Zoom in those few minutes, or about 9% of its staff.
Better.com is valued at $ 6.9 billion, earning it so-called unicorn status.
The company was ranked No. 1 in LinkedIn's top startups of 2021 and 2020. Better.com did not respond to a request for comment.
The Softbank-backed mortgage lender announced in May that it was going public through a special purpose acquisition company, or SPAC.
The day before the layoffs, the company announced that it received $ 750 million in cash as part of a modified agreement with investors, according to TechCrunch.
That would mean Better has a billion dollars in cash.
But tons of cash in a business don't counteract the performance of the mortgage market as a whole.
Garg then accused the fired employees of "stealing" from colleagues and clients for being unproductive and working only two hours a day, according to Fortune, who confirmed those sentiments in an interview with the CEO.
Other controversies
Several former employees interviewed by CNN Business said staff were shocked by the CEO's comments and the sudden layoff.
But Garg has been involved in controversy before, as evidenced by an email he sent to staff that was obtained by Forbes in 2020: "You are VERY ENDEMONICALLY SLOW. You are a bunch of SILLY DOLPHINS ... SO STOP. STOP RIGHT NOW. . YOU'RE SHAMMING ME, "he wrote.
"I got promoted, and then he's trying to portray everyone as lazy and money-stealing," said another former employee who asked not to be named and who recently won an award for his performance at the company.
"That's a disaster. I'd rather be broke than have whatever is going on in his head."
Chapman, who has worked in the mortgage business for nearly 20 years, also said that he had recently completed a positive performance review call with his manager.
Employees described a chaotic work culture at Better.com, one with many benefits, but also a CEO who used to throw curses at virtual meetings across the company.
"After my first meeting, I realized that I had to put it on silent and with headphones on, because I have five children and I didn't want them to hear that kind of language," Chapman said.
Chapman said he had four layoffs at various mortgage companies, but none were as "dull and dispassionate" as this one.
"I'm looking for the silver lining, but therein lies the reality of the situation," Chapman said.
"Things are not going to be what they were and it is going to require massive action on my part."
What went wrong?
The mortgage industry has been boosted by refinancing, which skyrocketed during the pandemic when mortgage rates fell to record lows.
But with mortgage rates rising, and expected to rise further, that boom is slowing.
After falling steadily during the first year of the pandemic, mortgage rates hit a record low in early 2021, with 30-year mortgages available for just 2.65%.
But the rates are increasing now.
The Mortgage Bankers Association expects the 30-year fixed-rate mortgage to end 2021 at 3.1% and rise to 4.0% by the end of 2022.
CNN's Anna Bahney contributed to this report.
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