[Global] Better.com employees discovered layoffs when severance payments appeared in payroll app

[Global] Better.com employees discovered layoffs when severance payments appeared in payroll app
10 Mar 2022

Mass layoffs at digital mortgage lender Better.com have begun. According to employees and other sources at the company, some affected workers learned the news when their severance cheque appeared in the company’s payroll app account, TechCrunch reports.

The layoffs were supposed to be announced by the company on March 9, however, one employee - who prefers to remain anonymous - told TechCrunch that “they accidentally rolled out the severance payslips too early.” 

Better.com executives are said to have planned the layoffs for March 8 but moved the date to March 9 when news of the initial date leaked.

When their mistake came to light, execs deleted the payments from some workers' payroll accounts. The anonymous employee said the severance cheques arrived without any additional communication from the company.

The employee told TechCrunch’s Mary Ann Azevedo, “Better Layoffs have started. Severance showing in our… app as of 12 AM respective time zones. No email, no call, nothing. This was handled disgustingly.”

The employee reportedly suspected that staff cuts were coming. They said, "Leadership remained absolutely silent, never acknowledged anything in regards to layoffs. They still haven’t."

An estimated 3,000 of the company’s 8,000 employees in the US and India are being let go. TechCrunch previously reported that the number affected would be 4,000 - half of the company - but the number of job losses ended up being "just over 3,000," according to a Better.com spokesperson.

The company spokesperson confirmed the figure on the afternoon of March 8 and shared a link to the e-mail that CFO Kevin Ryan ended up sending to employees on the matter after the payroll error.

In his e-mail to employees, Mr Ryan wrote that the company "had to adjust to volatility in the interest rate environment and refinancing market."

He said, "Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the U.S. and India in a substantial way."

Mr Ryan also said that the company would not be enforcing existing non-compete provisions but that non-disclosure provisions would remain in effect.

"This has not been an easy few months, and I want to express my sincere thanks to every member of the Better team for your hard work and focus," he added. "Our strongest days lie ahead."

It is significant that the communication was sent from Mr Ryan and not Better.com CEO Vishal Garg. Mr Garg experienced a dramatic backlash after laying off 900 employees during a Zoom meeting in early December 2021 in what many considered to be a cold and callous manner. 

The video of the Zoom meeting went viral globally and Mr Garg was highly criticised not only for the way he notified employees but for what employees described as verbally abusive behaviour.

According to employees at Better.com, an email notifying staff that “current market conditions” had led to the company “arriving at a mass layoff” was supposed to be sent on the morning of March 9. Then, later that morning, an email containing the names of affected managers would be sent to “safe managers” so they could take over the management of the remaining team members. Impacted employees would then be notified via email. Soon after, an all-hands meeting was planned for those who survived the layoffs.

When a member of staff is laid off they are supposed to receive correspondence to their personal email with instructions on how to return Better.com property.

The majority of impacted employees are reportedly in sales and operations; in particular, most of the refinance teams are being let go. Staff told TechCrunch that a list of potential layoff candidates was circulated in recent weeks but that the specific employees were only finalised in the last few days, based primarily on “business need and Nov-Jan performance.”

The severance package is reportedly 60 to 80 days’ wages.

The now infamous behaviour of CEO and co-founder Vishal Garg - including insults towards staff and investors and that reported history of verbal abuse - probably played a role in the latest decision. With the interest market changing dramatically, Better.com was forced to transition more towards being a “purchase” business, or one that helped people with new loans. The damage to its reputation is said to have made it more challenging for Better.com to attract new customers.

Macroeconomic factors have also had a negative impact on the company’s business. Higher interest rates, leading to a large drop in demand for re-financings, prompted the original layoffs in December. And interest rates continue to increase. Rising inflation is not helping matters.

On March 7, TechCrunch reported that the layoffs were coming this week after hearing that they were in the works in mid-February.

The way the original layoffs were handled in December led to a ripple effect of events for the company including the resignation of the company’s VP of communications, Patrick Lenihan; head of public relations, Tanya Gillogley; and head of marketing, Melanie Hahn. Their departures were the first of many executive departures that would take place over the next few months. Mr Garg "apologised" for "blundering" the mass layoff before taking a month-long "break."

Better.com has raised just over $900 million since it was founded in 2016. $500 million of that came from SoftBank in an April 2021 round that valued Better.com at $6 billion. On November 30, 2021, prior to the announcement of the first round of layoffs, CFO Kevin Ryan said in an internal email that Better.com would have $1 billion on its balance sheet by week’s end.


Source: TechCrunch

(Links and quotes via original reporting)

Mass layoffs at digital mortgage lender Better.com have begun. According to employees and other sources at the company, some affected workers learned the news when their severance cheque appeared in the company’s payroll app account, TechCrunch reports.

The layoffs were supposed to be announced by the company on March 9, however, one employee - who prefers to remain anonymous - told TechCrunch that “they accidentally rolled out the severance payslips too early.” 

Better.com executives are said to have planned the layoffs for March 8 but moved the date to March 9 when news of the initial date leaked.

When their mistake came to light, execs deleted the payments from some workers' payroll accounts. The anonymous employee said the severance cheques arrived without any additional communication from the company.

The employee told TechCrunch’s Mary Ann Azevedo, “Better Layoffs have started. Severance showing in our… app as of 12 AM respective time zones. No email, no call, nothing. This was handled disgustingly.”

The employee reportedly suspected that staff cuts were coming. They said, "Leadership remained absolutely silent, never acknowledged anything in regards to layoffs. They still haven’t."

An estimated 3,000 of the company’s 8,000 employees in the US and India are being let go. TechCrunch previously reported that the number affected would be 4,000 - half of the company - but the number of job losses ended up being "just over 3,000," according to a Better.com spokesperson.

The company spokesperson confirmed the figure on the afternoon of March 8 and shared a link to the e-mail that CFO Kevin Ryan ended up sending to employees on the matter after the payroll error.

In his e-mail to employees, Mr Ryan wrote that the company "had to adjust to volatility in the interest rate environment and refinancing market."

He said, "Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the U.S. and India in a substantial way."

Mr Ryan also said that the company would not be enforcing existing non-compete provisions but that non-disclosure provisions would remain in effect.

"This has not been an easy few months, and I want to express my sincere thanks to every member of the Better team for your hard work and focus," he added. "Our strongest days lie ahead."

It is significant that the communication was sent from Mr Ryan and not Better.com CEO Vishal Garg. Mr Garg experienced a dramatic backlash after laying off 900 employees during a Zoom meeting in early December 2021 in what many considered to be a cold and callous manner. 

The video of the Zoom meeting went viral globally and Mr Garg was highly criticised not only for the way he notified employees but for what employees described as verbally abusive behaviour.

According to employees at Better.com, an email notifying staff that “current market conditions” had led to the company “arriving at a mass layoff” was supposed to be sent on the morning of March 9. Then, later that morning, an email containing the names of affected managers would be sent to “safe managers” so they could take over the management of the remaining team members. Impacted employees would then be notified via email. Soon after, an all-hands meeting was planned for those who survived the layoffs.

When a member of staff is laid off they are supposed to receive correspondence to their personal email with instructions on how to return Better.com property.

The majority of impacted employees are reportedly in sales and operations; in particular, most of the refinance teams are being let go. Staff told TechCrunch that a list of potential layoff candidates was circulated in recent weeks but that the specific employees were only finalised in the last few days, based primarily on “business need and Nov-Jan performance.”

The severance package is reportedly 60 to 80 days’ wages.

The now infamous behaviour of CEO and co-founder Vishal Garg - including insults towards staff and investors and that reported history of verbal abuse - probably played a role in the latest decision. With the interest market changing dramatically, Better.com was forced to transition more towards being a “purchase” business, or one that helped people with new loans. The damage to its reputation is said to have made it more challenging for Better.com to attract new customers.

Macroeconomic factors have also had a negative impact on the company’s business. Higher interest rates, leading to a large drop in demand for re-financings, prompted the original layoffs in December. And interest rates continue to increase. Rising inflation is not helping matters.

On March 7, TechCrunch reported that the layoffs were coming this week after hearing that they were in the works in mid-February.

The way the original layoffs were handled in December led to a ripple effect of events for the company including the resignation of the company’s VP of communications, Patrick Lenihan; head of public relations, Tanya Gillogley; and head of marketing, Melanie Hahn. Their departures were the first of many executive departures that would take place over the next few months. Mr Garg "apologised" for "blundering" the mass layoff before taking a month-long "break."

Better.com has raised just over $900 million since it was founded in 2016. $500 million of that came from SoftBank in an April 2021 round that valued Better.com at $6 billion. On November 30, 2021, prior to the announcement of the first round of layoffs, CFO Kevin Ryan said in an internal email that Better.com would have $1 billion on its balance sheet by week’s end.


Source: TechCrunch

(Links and quotes via original reporting)