hit with third round of layoffs in yet another ‘substantial cut’ to its workforce

By Clint Rainey

April 19, 2022 hit with third round of layoffs in yet another ‘substantial cut’ to its workforce

Better, the mortgage company that is increasingly under fire for how it sprung mass layoffs on employees in December and March, has carried out yet another round of significant layoffs. This is the company’s third downsizing since that first round, conducted via Zoom, went viral. In a statement to Fast Company, it cited “ongoing instability in the mortgage environment” as the reason.

The first two rounds of layoffs cut over 4,000 jobs, almost half of Better’s workforce. A spokesperson didn’t respond to a question about how many employees were affected this time, but people familiar with the number say that, at present, it’s at least 1,000 employees.

A memo with the uneventful subject line “Company announcement: Changes to US Production workforce” disclosed the layoffs to workers early this morning. It states the layoffs represent “another substantial cut” to Better’s workforce, but nothing more specific. People familiar with the matter say roles in sales, operations, and Better Real Estate were targeted. Better’s real-estate arm is said to have been receiving considerable capital lately; it was created to help the startup grow beyond digital lending and into a Zillow and Redfin competitor.

Among those affected today is at least one newly pregnant woman. Much of the blowback Better received after its March layoffs revolved around it laying off a number of expecting parents.

Today’s memo, which was shared with Fast Company, doesn’t include CEO Vishal Garg’s name. (Insiders say Garg received lots of hate mail after the December and March mass layoffs.) Instead, it was signed by Richard Benson-Armer, Better’s chief people, performance, and culture officer, who initially joined to manage the PR crisis caused by the December 1 layoffs.

This is what the memo tells employees:

As you know, our team has been focused on ensuring that our business is nimble, able to weather industry headwinds and placed in the strongest position possible for the future by implementing operational changes, reducing costs and making the difficult but necessary decisions to reduce our workforce.

As the mortgage environment in which we operate continues to indicate further declines ahead, we have to do more to ensure Better is appropriately positioned, financially and operationally, to navigate this changing environment. It is through this that we will continue to work to further position Better on its pathway to profitability.

With this in mind, we have made the difficult decision to make another substantial cut to our production workforce in the United States.

Benson-Armer goes on to say, “This is not the measure we wanted to take. But, this is both prudent and necessary for the health of our business.” In December, Garg said Better lost $100 million the previous quarter.

In its statement to Fast Company, Better adds, “We are working hard to ensure that any employees affected hear directly from the company first in a personal, one-to-one meeting regarding any decisions and the significant steps the company will be taking to support those affected.” It says affected employees will receive the same severance package offered back in March, which is 60 to 80 working days of pay, plus three months of COBRA health insurance.

Yet again, employees received no warning of these layoffs from Better. Since public outrage erupted in December over the now-viral Zoom layoffs, which impacted 900 workers—only to deepen in March, when Better sprung layoffs on 3,000 more workers—Better’s public image has continued to suffer. A video leaked to Fast Company two weeks ago shows that Better held a second Zoom meeting right after the layoffs call in which Garg threatened the workers he didn’t lay off. That same week, Better tried offering voluntary buyouts to certain U.S. employees.

Workplace morale has understandably hit near rock-bottom. A common place for employees to air grievances is on the anonymous workplace-messaging site Blind. One employee wrote that today was the first day workers were supposed to return to their office’s workplace in person. “Layoffs are one thing but why would they set a massive RTO up unnecessarily and then lay off people that day with no heads up,” this person vented, adding: “Better is the worst.”

Others were surprised to learn their offices wouldn’t be opening at all today. Benson-Armer may have hinted at what’s occurring here at the end of the memo to employees:

We are also making changes to our footprint in select locations to achieve further cost savings. If this impacts you or your team, you will receive additional information about next steps of the transition in the coming weeks.