SoFi CEO Michael Cagney has stepped down after sexual harassment charges. This is a blow to tech start-ups, like Uber, that have been criticized for a "frat" culture. SoFi is short for Social Finance, Inc., and is the largest online lending company.
The evidence against Cagney is strong, including text messages and people who have seen Cagney flirting and holding hands with another employee. (Cagney is married with two children.) Employees also complain about Cagney bragging about his sexual prowess and about seeing supervisors and employees having sex in the office and in the parking lot. As a settlement, one employee was paid about $75,000 to leave SoFi.
Other lawsuits against the company include unfair labor practices (e.g., pay and breaks) and financial reporting issues. The company denies these claims.
In a message to employees, Cagney explained his reasons for leaving.
It is with a heavy heart that I am announcing that I will step down as CEO of SoFi by the end of
SoFi has been an amazing journey. From the early days with five of us in a one-room office in 2011, to 1,200 employees spread across the country today, few firms have matched our success. We have had massive impact on our members lives, lending over $20 billion to our over 350,000 members, saving them over $1.8 billion in student loan interest and $500 million in credit-card interest, and helping them advance their careers and relationships.
That impact keeps growing. In the second quarter alone, we funded over $3.1 billion in loans, producing $134 million in revenue and $61.6 million in adjusted EBITDA. I could not be prouder of the company's we've built together.
Recently, though, the focus has shifted more toward litigation and me personally. The combination of HR-related litigation and negative press have become a distraction from the company's core mission.
I want SoFi to focus on helping members, hiring the best people, and growing our company in a way consistent with our values. That can't happen as well as it should if people are focused on me, which isn't fair to our members, investors, or you.
I will be fully dedicated to the business through year-end, and will work closely with the Board to find the best candidate to lead us forward.
SoFi has built an incredible team. While we've come a long way, we're still in the early innings of what we can and will accomplish. I'm grateful to have had the opportunity to help get us to where we are today – and I look forward to seeing where all of you take SoFi in the coming years.
- Who is responsible for organizational culture and for maintaining a workplace free of harassment?
- Assess Cagney's resignation letter. To what extent does he demonstrate humility and accountability? Where does the letter fall short?
- Also assess the writing style, tone, audience focus, and organization. What works well, and what could be improved?