Digital mortgage company Better.com has conducted its third mass layoff in less than five months, citing a declining mortgage market, according to an email to employees seen by TechCrunch.
TechCrunch recently reported that the move was coming.
It is unclear at the time of writing how many people were affected by the layoffs, but sources familiar with internal happenings at the company estimate that it ranges from 1,200 to 1,500, meaning that the company has effectively reduced its headcount from about 10,000 in December to less than 5,000 now.
According to the subject line of the e-mail sent to all employees that went out at 8 a.m. EST today, the “U.S. Production Workforce” would be impacted. Sources familiar with the matter said Better Real Estate was among the impacted departments. The unit was at one time the “baby” of the company, sources say, and where a big chunk of investment dollars were going to go in 2022.
Better had been vocal about its desire to build out its purchase experience and move beyond digital lending to help people find and purchase homes — hence changing its name from Better Mortgage to just Better. It was also working to expand value-added offerings like title and homeowner’s insurance as part of its product suite.
Its refinance team is also believed to have been heavily impacted.
In an email to employees, Richard Benson-Armer — the company’s newly appointed chief people, performance and culture officer — told employees that layoffs would occur today and affected employees would receive a “one-on-one” phone call from “leaders.”
The company’s CEO Vishal Garg infamously laid off 900 people, or 9% of its workforce, via Zoom in December. Better then laid off another 3,100 people on March 8. In that round, affected employees knew they were going to be laid off when they saw a severance check in their Workday accounts — the payroll software the company uses.
In the email to employees, Benson-Armer said:
Team,
As you know, our team has been focused on ensuring that our business is nimble, able to weather industry headwinds and placed in the strongest position possible for the future by implementing operational changes, reducing costs and making the difficult but necessary decisions to reduce our workforce.
As the mortgage environment in which we operate continues to indicate further declines ahead, we have to do more to ensure Better is appropriately positioned, financially and operationally, to navigate this changing environment. It is through this that we will continue to work to further position Better on its pathway to profitability.
With this in mind, we have made the difficult decision to make another substantial cut to our production workforce in the United States. This is not the measure we wanted to take. But, this is both prudent and necessary for the health of our business.
We continue to prioritize transparency and care as we go through this process, and our leaders will be spending today making one-on-one calls to notify departing colleagues of this news. If you are impacted, you will receive a call today to learn the news personally and discuss next steps.
We are providing comprehensive severance packages – encompassing compensation, healthcare coverage and access to outplacement services – to all departing employees, who will receive:
Compensation: A minimum of 60 working days – and as much as 80 working days – of cash severance payments
Healthcare Coverage: Company healthcare benefits for those enrolled will remain effective until the end of the month (April 30, 2022) after which impacted employees will be able to opt into using COBRA, with Better covering the premiums until July 31 2022.
Outplacement services: Access to dedicated, one-to-one assistance for resume and candidate branding services, career coaching, job concierge search and support services and personalized job and networking opportunities through Better’s partnership with Randstad RiseSmart, a global leader in career transition support.
As we work to streamline our operations and strengthen our business in the face of these prevailing headwinds, we are also making changes to our footprint in select locations to achieve further cost savings. If this impacts you or your team, you will receive additional information about next steps of the transition in the coming weeks.
Thank you for all of your hard work, care for our customers, and commitment to our purpose in these difficult times.
Benson-Armer had been serving in the head people role since the departure of Alex D’Amico, who left in November, according to Inman. Notably, he is also a partner at Activant Capital, one of Better.com’s earliest investors as well as a former McKinsey consultant.
TechCrunch reached out to Better.com for comment but had not heard back at the time of writing. Also at the time of writing, employees were still waiting to hear if they were among the impacted employees.
This is a developing story.