Better, after firing 900 employees over Zoom, is laying off 3,000 more workers

When interest rates were low, the company, which gained notoriety last year after its CEO fired 900 employees, expanded rapidly. Kevin Ryan said in a letter posted on Better’s website that Tuesday’s layoffs were caused by a drop in origination volume due to rising interest rates.

“Unfortunately, that means we must take the difficult step of streamlining our operations further and reducing our workforce in both the US and India in a substantial way,” Ryan wrote. The decision was driven by the residential real estate market.

Mortgage rates have risen to a level not seen since the summer of 2019. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.81% in the week ending February 17th, up from 3.69% the previous week. Consumer spending is stronger than expected and rates are increasing because of it.

Better said that affected employees will be notified personally over the phone, potentially averting another public relations disaster like the one that followed CEO Vishal Garg’s decision to conduct a mass firing over Zoom. They will be able to find a new job with the help of a suite of services.

Some workers were unintentionally notified of their firing after seeing a severance payment in Better’s internal payroll system or in their bank accounts prior to the official announcement.

A person familiar with the glitch said that this was not the form of notification that they intended and that it was a result of an effort to ensure that impacted employees received severance payments as quickly as possible.

Better’s workforce was laid off 9% in December of 2021. Garg said that if you are on the call, you are part of the unlucky group that is being laid off. Your employment is terminated immediately.

Garg returned to his position in January after taking a break.

Better.com was once valued at over $6 billion. In 2020 and 2021, the company was the top startup. The Softbank-backed mortgage lender has been trying to go public, although those plans have been postponed due to the December layoffs.