Less than one month after laying off 3,000 employees, digital mortgage lender Better.com is offering its corporate, product, design and engineering employees 60 days paid severance, or voluntary separation plans, and health insurance coverage “to anyone who wants it,” according to several sources familiar with internal happenings at the company.
Better.com executives cited the current mortgage markets for the move in an email to employees. Eligible employees will get an email later today with the ability to accept the voluntary separation. The last day for employees who are under 40 years old to accept the offer is April 15 and employees who are 40 years old and above will have up to 21 days to accept the offer, according to an email from the company obtained by TechCrunch.
In addition, those sources said the company is losing “around $50 million a month,” citing a recent internal meeting in which the figure was disclosed. Better.com has scheduled a town hall meeting for all employees that will be held today.
TechCrunch reached out to the company for comment but it had not yet responded at the time of writing.
Since December, the company has conducted two mass layoffs. The manner in which they were conducted is believed to have tarnished its reputation badly, in addition to market conditions such as rising interest rates and a cooler refinancing market that have impacted its business prospects.
First, on December 1, Better.com laid off about 900 employees via a Zoom video call that ended up going viral. CEO and co-founder Vishal Garg was universally criticized for being cold and unfeeling in his approach. He also added insult to injury by days later publicly accusing affected workers of “stealing” from their colleagues and customers by being unproductive.
On top of that, just one day before, CFO Kevin Ryan sent an email to employees saying that the company would have $1 billion on its balance sheet by the end of that week. In the weeks following the layoffs, Garg “apologized” and took a month-long “break,” employees detailed how he “led by fear,” and a number of senior executives and two board members resigned.
Then, on March 8, the company laid off an estimated 3,000 of its remaining 8,000 employees in the U.S. and India and “accidentally rolled out the severance pay slips too early.” Many workers reported that they initially found out by seeing a severance check in their Workday accounts — the payroll software the company uses. When execs realized their mistake, those employees said, they deleted the checks from some people’s Workday accounts. According to one affected employee who wished to remain anonymous, the severance checks arrived without any additional communication from the company.
Below is the email that Richard Benson-Armer, Better’s chief people, performance and culture officer, sent to the company this afternoon outlining the voluntary separation program that TechCrunch obtained:
As many of you know, the uncertain mortgage market conditions of the last couple of weeks have created an exceedingly challenging operating environment for many companies in our industry. This is requiring many of them to make difficult decisions in order to sustain their businesses. Despite ongoing efforts to streamline our operations and ensure a strong path forward for the company, Better is no exception.
For that reason, we are announcing a voluntary separation program to many US-based Better employees in Corporate and PDE who are Level 10 and below. The offer is for 60 working days of severance pay and health insurance coverage for those who leave the company.
At some point later today, eligible employees will receive an email and a separation agreement offer with the terms that apply to them individually. Employees who are eligible and wish to accept the agreement can sign it using Workday.
Employees who are under 40 years old will have up to seven days from receipt of the agreement to accept the offer. The last day at Better for those who accept the offer will be Friday, April 15th. They will also receive their final payment on this date.
Employees who are 40 years old and above will have up to 21 days to accept the offer. Those who sign the separation agreement on a Wednesday or earlier will have a last day at Better on Friday of that week, with final payment on that date. Those who sign the agreement on a Thursday or Friday will have a last day at Better on Friday of the following week, with final payment on that date.
Access to the Better system will be turned off shortly after signing the agreement, in accordance with financial, legal and security best practices and regulations for our industry. Departing employees should ensure their personal email and mailing address are updated in Workday.
As always, adherence to our Code of Conduct and Employee Handbook will be enforced throughout this process.
While this voluntary separation exercise is difficult, we remain confident in the strong path ahead for Better. Given the headwinds facing our industry, collaboration and innovation – the hallmarks on which Better built its success – will be more essential than ever. For that reason, we look forward to returning to in-office mode in the coming weeks, with re-examined RTO policies.
Better has a tremendous future ahead, built on the ethos that made us so successful in the first place. That includes a culture that rewards high performance and excellent customer service. I look forward to sharing more information on that in the weeks ahead.
Thank you for everything you do to serve our customers and support this business. We remain resolute in our commitment to making homeownership simpler, faster and more accessible for all Americans.