Fired workers sue First Guaranty Mortgage over lack of notice

Another terminated employee who spoke to MPA said the tactic is not unusual for First Guaranty Mortgage. Another round of layoffs – albeit a much smaller one involving some 50 workers – occurred last March after PIMCO pulled its investment in the lender, he said.

The following month, between 30 and 50 people were laid off from the company’s retail hybrid department, it was stated. While no notice was given on that round of layoffs, he noted, it didn’t fall under provisions of the WARN Act which compels employers to notify to cuts of 100 or more workers, or 10% of the workforce. The fired worker noted the 428 laid off on Friday were in the wholesale, correspondent and retail segments.

“It was absolute panic,” the fired worker said in explaining the sudden notice to layoffs after the PIMCO pullout. He requested anonymity for fear of having his own back pay and benefits jeopardized. “We were not told that PIMCO pulled their funding in March, that’s number one,” he added. “My sense is that when PIMCO pulled their funding in March, after they attempted to sell off a part, the company felt they would be able to get funding elsewhere. But if you look at the changes and the history of rates – rates shifted significantly at the end of March – the paper, as it were, became much less valued as a result of that shift in rates. As rates continued to rise in April, the piece we were looking for investors in became much less valuable, and I think that precipitated this.”

The fired worker said the mass termination via Microsoft Teams was reminiscent of the infamous layoff of some 900 workers at Better.com last December.

“It was pretty much the same thing,” the fired worker said, noting the only difference was the Better.com workers were fired via Zoom. “It was a surprise to everybody, absolutely. There were no questions; it lasted maybe 10 minutes.”