Mass layoffs continue at Better.com.
On March 8, more than 3,000 of the digital mortgage lender's 8,000 employees were served severance cheques on the company's internal payroll app without any prior notice.
According to employees who spoke to TechCrunch, the layoffs were meant to occur on March 9, but the severance cheques were accidentally released a day early.
This comes three months after Better.com and its Co-founder and CEO Vishal Garg faced severe backlash in December 2020 for laying off 900 employees via a Zoom call.
After the payroll slip, an email apologising for the handling of these March layoffs was sent by the company's CFO Kevin Ryan. It is reported that the affected employees will receive 60-80 days of pay as their severance package.
Vishal Garg, Co-founder and CEO, Better.com
Kevin's email said that Better.com "had to adjust to volatility in the interest rate environment and refinancing market”.
“Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the U.S. and India in a substantial way,” he said.
This was reflected in the teams that were let go. The majority of the employees are in sales and operations, with the refinance team, in particular, having lost a lot of members.
The mail added that the company would not enforce existing non-compete clauses, but would enforce non-disclosure agreements.
Despite having a high valuation of $6 billion, Better.com has been bleeding senior staff since the December Zoom call.
TechCrunch speculated that the CEO's reputation for abusive behaviour along with bad business metrics in the first two months of 2022 has led to the company pivoting to a different model after its original business was hit by reputational damage after the December Zoom call.
It is interesting to note that the company had raised $500 million last April.
Edited by Saheli Sen Gupta