money SoftBank-Backed Startup Better.com Axes 900 in Three Minutes
Better.com, the SoftBank-backed mortgage startup with a wildly temperamental founder, laid off roughly 10 percent of its workforce today, or about 900 people in the United States and India, according to two people familiar with the situation. And the company did so in brutal fashion.
In the U.S. all affected workers were abruptly summoned into a mass webinar on Wednesday, where billionaire founder and CEO Vishal Garg delivered a short speech informing them that they were being terminated.
“It was three minutes tops,” one person who was on the call told The Daily Beast. Garg had “a very sad face on. How genuine it was, I don't know.”
The abrasive CEO—who once sent staffers an email likening them to “a bunch of DUMB DOLPHINS”—allegedly declared that he “might cry” while delivering the news. (He didn’t, the person said.)
He Threatened to Burn His Business Partner Alive. Now He’s a Billionaire.
After Garg’s speech, the meeting quickly ended, and the employees’ computers automatically shut down, multiple sources said. Staffers who hadn’t been able to attend the last-minute conference were left scrambling to figure out why their devices had stopped working. Other employees were on vacation and didn’t know they were out of jobs.
“They dumped us like trash. We were there since the beginning and worked hard for the company and for our roles,” another now-former employee said.
A spokesperson for Better said that the company has spent the day trying to reach workers individually if they weren’t on the webinar.
Chief financial officer, Kevin Smith, meanwhile, pitched the layoffs as a fiscal win: “A fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market,” he said in a statement.
The layoffs took place across the company. Among the casualties was the entire diversity, equity, and inclusion recruiting team.
Better added several thousand jobs this year, but the company has struggled to prove it can be sustainably profitable amid broader industry headwinds. In its most recent financial disclosure it acknowledged that it likely will not be able to maintain its growth rate from earlier in the pandemic, when low interest rates caused a flurry of mortgage refinancings.
The company has been working to go public via a SPAC, and just yesterday it announced an accelerated $750 million cash payment from participants in that deal. It now has more than $1 billion in cash on its balance sheet.
That capital evidently wasn’t enough to keep the laid-off workers employed through the holidays. A company source says that American employees who were let go will get severance through December and health-care coverage through February.
“I'm 25 weeks pregnant and due in March. I don't know what I am going to do once my insurance ends,” one of the terminated employees said. “Do I look for a new job while being so close to my due date? Let's be realistic, employers are not going to want to hire someone who is 25 weeks pregnant and [has] to go on leave in three months.
Garg has faced scrutiny before. In August The Daily Beast reported on corporate governance concerns at Better, after he awarded massive amounts of equity with unusually good terms to one of his top lieutenants, who was ultimately forced out of the company amid bullying allegations.
Two board members resigned last winter, seemingly due to the internal tumult.
Garg, however, has projected total confidence, and evidently he wasn’t previously worried about saving the company money—either by reducing headcount or his own compensation. His bonus check last year, paid entirely in cash, clocked in at $25 million.
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