Explained: Better.com, the mortgage company that laid off more than 900 employees in a Zoom call
Vishal Garg, CEO of an American mortgage and homeownership company of Indian origin laid off more than 900 employees during a short Zoom call last week. Garg cited market efficiency, performance and productivity as the reason for the layoffs. Among those fired was the Diversity, Equity and Inclusion Recruitment Team. We learn that the layoffs occurred mainly in the United States and India.
What does Better.com do?
Launched in 2014, Better.com works to “improve real estate mortgages” and financing by allowing people to apply for loans and finance online, instead of having to go directly to banks. The company claims to offer fixed and adjustable rate loans for conventional and jumbo loans for several types of homes without charging any commission.
Over the years, the company quickly expanded its footprint, partnering with different companies in the process. For example, in 2015 the founders partnered with Avex Funding, a California-based originator specializing in compliant and jumbo mortgages for over 10 years.
In 2016, the company changed its name to Better Mortgage and secured $ 30 million in Series A financing. The same company has also been licensed as a Fannie Mae seller or repairer. A year later, the company again raised $ 15 million in Series B funding with Kleiner Perkins Caufield Byers, while in 2019, the company again raised $ 160 million in Series C funding.
The layoffs also closely followed the company, which raised $ 750 million in new capital from two of its backers, Aurora Acquisition Corporation and SoftBank. The company also plans to go public soon through the Special Purpose Acquisition Company (SPAC).
Why were the employees made redundant?
According to the Zoom call, Garg said the market’s lack of efficiency, performance and productivity was the reason people were made redundant. The company’s chief financial officer, Kevin Ryan, said in a statement that “a fortress balance sheet and a reduced and concentrated workforce together” were needed to “play the offensive game to enter a property market. in radical evolution ”.
Meanwhile, Garg also accused employees of “robbing” colleagues and clients by being unproductive and working only two hours a day.
Are the company’s Indian employees also impacted?
The company had hired around 1,100 employees in India after the start of the pandemic in early 2020. It had announced the integration of people made redundant from the hotel industry. At the time, however, US-based mortgage companies were on an aggressive hiring wave globally due to increased demand for mortgage products and low interest rates.
During the pandemic, Better.com also paid its employees in India an allowance of Rs 10,000 per month for Covid19 benefits, in addition to paying them for incurring additional expenses for their work-from-home facility. India is home to most of the company’s back-end operations. Although the company has not confirmed the geographic distribution of the layoff, it appears that several people in India have also received pink slips.
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