Better.com lays off a third of its workforce

Better.com is laying off over a third of its workforce, citing rising interest rates that are cutting into the company’s volume, the company announced Tuesday.

The lender, which fired 900 staff members in a Zoom call in December, is cutting personnel in both the U.S. and India as it adjusts its size due to volatility in rates reducing refinance activity, Kevin Ryan, Better chief financial officer and interim president, said in an email reviewed by National Mortgage News. Unlike that infamous call in which CEO Vishal Garg made a mass notification to those impacted, the affected employees this time will be contacted individually, the memo said.

“This decision is driven heavily by the headwinds affecting the residential real estate market; it is in no way a reflection on the personal performance of any departing team members, all of whom have contributed to Better’s success,” Ryan wrote. The interim president helmed the company when Garg took a five week leave of absence following the December firings.

The cuts will impact just over 3,000 of the company’s 9,300 employees, The New York Times reported. The company last month said it had approximately 5,200 workers in the U.S. and approximately 4,100 in India. Better was reportedly mulling laying off half of its staff, and a TechCrunch report Monday alleged executives had postponed an earlier layoff date after the timing of the cuts was leaked.

Better’s move comes amid internal turmoil, with a search for new executives following bad press and resignations by company leaders after Garg’s fateful call to employees last year. The company is also reeling financially, reporting a net loss between $167 million and $182 million in the fourth quarter in a Securities and Exchange Commission filing last month. The loss, attributed by Better to negative media coverage and a slowdown in refinance activity, amounted to a 17% to 22% decline in revenue from the third quarter of 2021.

Members of the Better leadership team will reach out to affected employees individually in the coming days, Ryan wrote, and fired staff will be eligible for a minimum of 60 working days to a maximum of 80 working days worth of severance payments. Employees will also receive medical benefits through March, COBRA coverage for three extra months and support from Randstad RiseSmart, a career transition firm.

Ryan said he and Better Chief Compliance Officer and General Counsel Paula Tuffin will address the entire firm after conversations with departing employees. Better said it will discuss with employees in the next few weeks its 2022 strategy but made no mention of its anticipated merger with special purpose acquisition company Aurora Acquisitions.

The company is still seeking a new chairman, president and chief human resources officer following a law firm’s independent review of company culture. Better last month hired Sushil Sharma as chief growth officer, a new position to oversee marketing analytics, CRM, growth and acquisition teams.

A wave of executives and support staff have resigned from Better in the past two months, including Sarah Pierce, one of the company’s three highest-compensated executives. Other departures include Better’s former head of real estate services, two directors and other public relations and marketing staff.