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How Better.com’s reputation got even worse

Posted by sayam

April 1, 2022

Better.com, an online mortgage lender, simultaneously laid off over 3,000 employees in the U.S. and India in early March, barely three months after CEO Vishal Garg received severe backlash for the way he fired 900 employees – 9% of the company’s workforce -- over a joint Zoom call. When a recording of Garg’s terse, emotionless Zoom call went viral on the internet, he apologized for his poor handling of the layoffs and promised to do better.

How Better.com handled round two

Better.com planned to execute its second round of layoffs on March 8, but when news of the target date leaked, the company switched the date to March 9. However, because the company neglected to adjust the layoff date on its payroll app, severance notifications for sacked employees popped up in the app March 8 at 12 a.m.

According to affected employees, severance payments appeared with no accompanying call or written communication. Staff only fully grasped they’d been fired when their computer systems stopped working and then automatically shut down shortly thereafter.

“This was certainly not the form of notification that we intended and stemmed from an effort to ensure that impacted employees received severance payments as quickly as possible," the company said in a statement.

Employees’ reactions

Many of the 3,000 dismissed employees used LinkedIn to express their shock and to share their harrowing layoff experiences. For example, one woman described her computer suddenly powering off in the middle of a work project.

Colleague Kiana Brown, a single mother, explained she’d relocated for the job and had spent hours studying the mortgage industry to advance her skills. “I understand layoffs happen.” Brown wrote. “What I don’t understand is how the company communicated the news.”

Another employee used Slack to urge Garg and CFO Kevin Ryan to provide extended medical benefits to all the pregnant women getting laid off on International Women’s Day (March 8).

The company’s official statement

According to TechCrunch, CFO Ryan delivered news of the second round of downsizing. In an email to employees, he explained that the layoffs were precipitated by changes in the residential real estate sector, such as volatile interest rates and an expected drop in the number of refinance transactions.

“Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the US and India in a substantial way," he wrote in a statement dated March 8 and published on Better.com’s website. While Ryan also said that laid-off employees would be eligible for at least 60 working days of cash severance pay, some employees posted statements on LinkedIn disputing that this was the case.

Will Better.com’s reputation suffer?

Although Garg stepped down from the CEO position after the Zoom call disaster, he resumed control again in January 2022 with the support of the company’s board of directors after he reportedly took time off for “reflection.” In the meantime, Better.com appears to be powering ahead with its plans to go public, which it first disclosed in May 2021.

Given his shaky leadership record, whether the company can attract the confidence of investors remains to be seen. Further, given the amount of negative press Better.com has received and the number of scathing social media posts by former employees, it is questionable whether the company will be able to continue to attract and retain talented candidates.

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sayam

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How Better.com’s reputation got even worse

How Better.com handled round two

Employees’ reactions

The company’s official statement

Will Better.com’s reputation suffer?

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sayam

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