Online-Mortgage Lender Better Fires 3,000 in Latest Cuts

(Bloomberg) -- Online-mortgage lender Better is firing roughly 3,000 employees in the U.S. and India as rising interest rates weigh on the volume of new loans.

The total represents about 35% of the company’s workforce, according to a person familiar with the matter who asked not to be identified discussing private information.

Better eliminated approximately 9% of its workforce last year, announcing the move in a video conference call. Chief Executive Officer Vishal Garg later apologized for how that round of cuts was handled and took a hiatus before returning in January. This time, the company said it would contact all of the affected workers personally.

But some workers received their severance payments before being personally informed that they were being let go. Wesley Bergeron, who was a market manager at Better based in Knoxville, Tennessee, said he noticed the deposit in his bank account at around 7:15 a.m. on Tuesday. He presumed he was being fired based on past media coverage he’d read and conversations with others in the company about potential layoffs. He also lost computer access before formally receiving a call from the company later that afternoon.

“I was one of the first people that morning to say, ‘Is this the way that we’re going to find out that we’re getting laid off, by seeing a huge lump sum of money in our accounts?’” Bergeron said in an interview. “That just triggered everybody to check their accounts,” Bergeron said. Once people noticed, he said some decided to “go on LinkedIn and post that ‘I’m open to work.’”

Better said in an email that a “small number of employees” were notified of the layoffs through severance payments that appeared in their bank accounts or Better’s internal payroll system.

“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,” Better said.

All staff will be eligible for severance payments, and U.S. employees will receive extended medical benefits.

“This decision is driven heavily by the headwinds affecting the residential real estate market,” Chief Financial Officer Kevin Ryan said in an email sent to employees seen by Bloomberg News. “It is in no way a reflection on the personal performance of any departing team members, all of whom have contributed to Better’s success.”

The job cuts were previously reported by TechCrunch and the New York Times.

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