Better.com tried to convince some of its employees to leave earlier this month. So it likely wasn’t a surprise when the company ended up pushing those who didn’t jump.
The online mortgage startup sent around a memo on Tuesday announcing a “substantial cut” to the company’s workforce, the Wall Street Journal reported. The exact number of employees to get the ax couldn’t be confirmed, but employees affected by the layoffs include members of the sales team, real estate business and mortgage operations.
“This is not the measure we wanted to take,” Richard Benson-Armer, Better.com’s chief people, performance and culture officer, wrote in the memo. “But, this is both prudent and necessary for the health of our business.”
Unlucky employees aren’t walking away empty-handed. Laid-off workers will receive between 60 and 80 days of severance pay, as well as health coverage through the end of July, according to the Journal.
That’s more or less in line with what the company was reportedly offering in its voluntary separation plans earlier this month. The startup reportedly offered up plans that entitled employees to as much as 60 days of severance and health insurance.
Better.com’s headcount after the latest round of layoffs — the second in as many months — is unclear, but employee numbers seem to be dwindling quickly at the company, which was founded in 2016 as a “digital-first homeownership company,” offering mortgage, title and homeowners insurance services.
Last month, the New York-based company laid off 3,000 workers in the United States and India, reducing its headcount by more than a third. Some of those laid off in that round reportedly learned of cuts before they were announced after Better.com accidentally rolled out severance payments prematurely.
In December, CEO Vishal Garg took a leave of absence after firing more than 900 employees via Zoom, accusing some in an anonymous online post of being unproductive and stealing from the company.
The handling of those layoffs triggered an internal review and led to the resignations of several executives.
The faltering mortgage industry was cited in the memo as one reason for the latest round of layoffs. In recent weeks, mortgage rates have been climbing to their highest level since the pandemic began, leading to a drop in mortgage applications.
Better.com isn’t alone. Movement Mortgage recently laid off around 170 employees, largely in the processing, underwriting and closing departments. Interactive Mortgage and Freedom Mortgage also recently reduced staff.
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[WSJ] — Holden Walter-Warner