Better.com laid off its in-house real estate agents as the battered lender adjusts its operations
The New York City-based company abruptly shut down its Better Real Estate arm Wednesday,
A former employee who wished to remain anonymous said they woke up Wednesday and couldn't log into their Gmail account or work computer, and was told of the layoff by a colleague.
"You literally woke up and the company didn't exist anymore," the former worker told National Mortgage News.
Better did not respond to a request for comment Friday. There were no Worker Adjustment and Retraining Notifications filed in New York City, where the company is based.
The move comes one month after Better reported an enormous $889 million loss in 2022, driven by the mortgage market's
Better Real Estate generated the majority of the lender's non-mortgage revenue through brokerage fees and the sale price of homes sold through the Better Cash Offer Program, according to the May disclosure. The department produced $23.1 million in revenue last year against $20.6 million the year prior. It is licensed in 37 states and Washington, D.C., although it can refer business to its network of thousands of third-party brokers in all 50 states, it said.
The company slashed its real estate agents' pay by over 50% last August and forced employees to waive their annual bonus, according to the former employee. Laid off personnel were allegedly given 30 days of severance pay and health benefits through September.
Better offered impacted workers to continue working as partner agents, with Better collecting referral fees equal to 20% of their commissions, according to reports and the former employee. Agents get to keep their client lists and listings, but had a Monday deadline to agree, the former employee said.
The department saw its transaction volume fall last year, from $2.1 billion in 2021 to $1.7 billion last year, the SEC filing described. Better also previously stopped advertising its Cash Offer program and scaled down its roster of in-house agents to align with declining mortgage volumes.
The digital lender endured a difficult year with net losses more than doubling from the $301.1 million loss
Widely publicized layoffs have also contributed to poor morale, Better acknowledged in the SEC filing. Once at a peak of approximately 10,400 employees, the lender closed the year with just 1,300 team members, with 600 in the U.S.550 in India and 150 in the United Kingdom. It also has more U.S. mortgage production employees based in India; with 300 abroad and 200 stateside.
"Significant declines in loan production volume and revenue, and related workforce reductions, have put significant strain on our business which we, to-date, have had limited success in managing," the filing said.
Business losses from a slower mortgage market were exacerbated by the massive layoffs and subsequent negative media coverage beginning with CEO Vishal Garg's
The bad press extinguished at least one unnamed commercial partnership and Barclays wound down a $500 million warehouse line of credit, according to the filing. The firm conducted two independent reviews of its company culture in the past year-and-a half.
Better is also embroiled in an SEC probe and separate
