Main Highlights:
- According to sources acquainted with its internal operations, Better.com is preparing to let off about half of its approximately 8,000 employees this week.
- The move comes less than three months after the New York-based corporation let off 9% of its workforce — or 900 employees — during a Zoom call that went viral, prompting the departure of several top executives and a blitz of bad headlines.
- While most of the company’s employees work in sales and operations, the layoff is projected to affect the whole organization, affecting around 4,000 people directly.
- Macroeconomic factors also harmed the company’s operations. Increased interest rates contributed to the December layoffs, as did a considerable fall in demand for refinancings.
- On November 30, 2021, just before the announcement of the first wave of layoffs, CFO Kevin Ryan indicated in an internal email that Better.com would have a $1 billion balance sheet by the end of the week.
According to people familiar with its internal operations, online mortgage provider Better.com is ready to lay off about half of its approximately 8,000 employees this week. On February 18, TechCrunch initially reported on the impending round of layoffs.
The action comes less than three months after the New York-based firm fired off 9% of its workforce — or 900 workers — during a Zoom call that went viral, resulting in the resignation of many top executives and a barrage of negative press for the company.
According to insiders, the next layoff is expected to take place on Wednesday, March 9. The release was previously scheduled for earlier in the month, but management shifted the date due to their dissatisfaction with the dates revealed.
While most of the company’s employees work in sales and operations, the layoff is expected to affect the whole organization and directly touch around 4,000 workers. Better.com employs people worldwide, including in the United States and India.
Vishal Garg’s antics — insulting personnel and investors and a known history of verbal abuse — almost certainly had a part in the recent decision. With the interest rate environment shifting substantially, Better.com needed to evolve into a “buy” firm or one that assisted individuals in obtaining new loans. The blow to Better.com’s image appears to have made it more challenging to acquire new clients.
Economic demands of employees
Macroeconomic considerations also had a detrimental effect on the company’s operations. Increased interest rates, which resulted in a significant decline in demand for refinancings, contributed to the December layoffs. Interest rates are steadily rising. Inflation is aggravating the situation.
Regrettably, the company’s roughly 5,000 employees will lose their employment in a couple of months due to all of this. Meanwhile, Garg remains the company’s CEO following a month-long “break.”
There is no indication yet on when or if the firm would proceed with its SPAC, although given the situation of Better.com’s business, it would be astonishing if it did. We reported last year that the SPAC planned to value Better.com at $6.9 billion. It’s probably reasonable to conclude that its current value is far lower.
Since its start in 2016, the firm has funded just over $900 million, including $500 million from SoftBank in an April 2021 round that valued Better.com at $6 billion. On November 30, 2021, just before the first round of layoffs was revealed, CFO Kevin Ryan stated in an internal email that Better.com would have a $1 billion balance sheet by week’s end.
About Better.com
Better Holdco, Inc. (Better or Better.com) is a United States-based housing company that provides an online mortgage origination platform and related services. Founded in 2014 by CEO Vishal Garg, the firm launched its first business, Better Mortgage, in 2016 and has since acquired subsidiaries focused on real estate, title, and homeowners’ insurance. SoftBank and Novator have invested in the firm, which is valued at US$4 billion in 2020. The corporation is based in Lower Manhattan at 3 World Trade Center.
Better Holdco has garnered widespread attention for its meteoric ascent, which includes intentions to go public via a SPAC merger by the end of 2021. The transaction is expected to value the firm at around $6.9 billion.
