The descent continues for the mortgage startup Better.com, which had swelled to a $7.7 billion valuation before its founder callously laid off 900 workers in December, causing the company to go viral for all the wrong reasons.
Now Better has begun laying off a large number of additional workers, according to an email from company CFO Kevin Ryan, which The Daily Beast obtained.
TechCrunch reported Monday evening that the final number would clock in at around 4,000 people, or roughly 50 percent of the staff—a number consistent with what multiple sources have told The Daily Beast as well.
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According to sources and screenshots of Slack messages, some current employees believe they found out they had been laid off after they logged into their company accounts, which showed a tab for severance pay at the top of the list.
Multiple current workers posted in a company Slack that the deposit had already hit her bank accounts, according to screenshots of their messages.
“Was this the way we were supposed to find out?” one current worker wrote, later adding that the situation amounted to “coward shit…grade A.”
“I’m sorry … that is the crappiest way to find out,” wrote another.
“This is disgusting— letting people find out through the payment app,” a third current employee told The Daily Beast.
It’s unclear if the severance tab was posted by mistake, as multiple people said the information later disappeared. One person posted in Slack that someone at the company “must’ve hit the button too soon.”
Better’s decline has been fueled both by blowback from the December layoffs—in which the founder and CEO, Vishal Garg, axed employees via a mass webinar—and from a broader downturn in the mortgage industry.
It’s not yet clear how Garg is taking this week’s news. Some of his staffers have previously expressed frustration with his seemingly unemotional attitude.
Case in point: One day last summer, Garg arrived at Better’s World Trade Center offices with a miniature hatchet, a gift for an executive who had just laid off a number of employees, according to three people with knowledge of the situation.
The gift rankled the building’s security team, who noticed the ax when it went through a scanner at a security checkpoint. To some at the company, it was yet another incident that conveyed, at a minimum, Garg’s poor taste.
Better did not respond to a request for comment.
The company has been in turmoil for many months. “We’re so sick of being mistreated, that’s why there’s no loyalty. We’re all sick of being bullied and berated,” one recently departed staffer told The Daily Beast. “The layoffs was the thing that the public saw…[but] it was just the last straw.”
Large numbers of current and former Better employees have been leaking to the press, which has created a heightened state of paranoia internally. Some employees fear that company officials have been posing as journalists to figure out who’s talking.
As TechCrunch reported in January, earlier this year Garg held an “Ask Me Anything” session for certain employees but declined to stream the event more broadly. Those who did attend had to put their phones in a paper bag and were required to walk through a metal detector to weed out any other audio recorders.
The chaos burst into the open on Dec. 1, just a day after Better announced that it had raised $750 million in new financing.
That morning, Garg ushered workers into a mass webinar, which many employees assumed was related to the cash infusion. Instead, he delivered a three-minute monotone speech informing them that they were out of jobs.
“If you’re on this call, you are part of the unlucky group,” he said. “Your employment is terminated effective immediately.”
After a video of the firing went viral, Garg was forced to briefly step aside as CEO, only to return in January.
The volatile founder, who once threatened to burn his former best friend alive, has previously made news for a tangle of lawsuits from old business partners and for questions about enormous equity handouts he allegedly bestowed on one of his top lieutenants.
It remains to be seen whether Better can bounce back from the tumult.
According to recent corporate filings, Garg has agreed to personally “indemnify” one of its principal backers, the Japanese conglomerate SoftBank, for certain losses it may realize on its investment.
And things have been trending poorly. The company said in a February filing that its projected loss for the fourth quarter alone was between $167 million and $182 million.
As for the layoffs, multiple current and former employees feel that Better hired too aggressively over the last two years, when record low interest rates had buoyed its business.
“This is what happens in the mortgage market, eventually the gravy train stops,” a former senior employee said.
A more cautious CEO may have accounted for that inevitable downturn, the person said. Instead, “Vishal went all in.”
