Better.com announces third round of layoffs in five months

Better.com is cutting more workers, blaming declining mortgage volumes for its third round of layoffs in the past five months.

The lender, in an email to employees Tuesday morning, didn’t say how many staff would be let go but called the cut “substantial.” The mortgage firm has laid off over a third of its formerly 9,000-employee workforce in periodic cuts since CEO Vishal Garg infamously fired 900 employees in a December Zoom call.

“This is not the measure we wanted to take. But, this is both prudent and necessary for the health of our business,” said Richard Benson-Armer, Better’s chief people, performance and culture officer, in an email reviewed by National Mortgage News.

The company is also downsizing its physical footprint, Benson-Armer wrote. The moves are in reaction to declining volume brought about by mortgage rates rising to 5%, soaring home prices and the protracted end to the refinance boom. The company in February revealed a Q4 2021 net loss in the range of $167 million and $182 million, hits taken from waning refis and negative media coverage from the Zoom firing, it said.

Garg, immediately following that December call, said he was undisciplined in overhiring and “probably pissed away $200 million” of the $250 million the company made the year prior, according to TechCrunch, which reported the video earlier this month.

“We probably could have made more money last year and been leaner, meaner and hungrier,” Garg said on the video.

Better.com said company leaders will make personal calls to departing workers and it’s compensating affected staff with 60 days to 80 days worth of cash severance payments. The lender is also keeping intact healthcare coverage through the end of the month, COBRA coverage through the end of July and support from career transition firm Randstad RiseSmart.

The firm isn’t the only mortgage player downsizing in the wake of the refi boom but has likely suffered the biggest public relations hit, with company leaders, marketing and public relations staff resigning in the wake of Garg’s December Zoom call. The incident prompted an internal cultural review and a search for a fresh slate of executives. The lender also has a pending merger with special purpose acquisition company Aurora Acquisition.