Months after its CEO was forced to apologize for unceremoniously axing 900 employees on a Zoom call, digital mortgage lender Better.com is undergoing a deeper round of cuts.
The New York-based company confirmed Tuesday that it is laying off over 3,000 additional workers in the U.S. and India — reducing its overall headcount by more than 34 percent.
The layoffs were prompted by challenging market conditions and were not performance-related, Kevin Ryan, the firm’s CFO and interim president, wrote in a staff memo Tuesday. Some staffers reportedly learned of the cuts a day earlier than expected, after the company accidentally rolled out severance payments prematurely.
The payments showed up in workers’ payroll accounts at midnight on Tuesday, TechCrunch reported, citing an employee who spoke on condition of anonymity.
“No email, no call, nothing,” the employee said. “This was handled disgustingly.”
A spokesperson for Better.com declined to comment.
The mass layoffs punctuate a rocky period for the company, whose CEO, Vishal Garg, took a leave of absence in December after firing more than 900 employees over Zoom and accusing some, in an anonymous online post for which he later took credit, of being unproductive and stealing from the company.
Garg’s handling of those earlier firings, which the board subsequently described as “very regrettable,” triggered an internal review and precipitated the resignations of other executives, including the company’s vice president of communications and its heads of marketing and public relations. It may also have negatively impacted the company’s ability to secure new customers.
Ryan, who temporarily took the reins before Garg returned to his post in January, said the need to cut expenses was driven by a “dramatic drop in [mortgage] origination volume due to rising interest rates.”
“We have huge opportunities ahead to grow and to serve, but we must adjust to volatility in the interest rate environment and refinancing market to get there successfully,” Ryan wrote in the memo.
Rising interest rates, which have softened demand for mortgages and refinancings, were said to have contributed to the original downsizing in December.
The company said it will contact affected employees by phone in the coming days, and those let go will receive cash severance equivalent to between 60 and 80 working days. Affected employees will also receive extended medical benefits.
Founded in 2016, Better describes itself as a “digital-first homeownership company” offering mortgage, title and homeowners insurance services.