After Axing 900 Workers Over Zoom, Better Fires 3,000 More
Better.com, the embattled online mortgage company, announced Tuesday (Wednesday, Mar. 8, 2022, in Manila) that it's taking the "difficult step of streamlining" its operations and laying off about one-third of its workforce, or roughly 3,000 jobs, Jordan Valinsky reported for CNN Business.
Photo Insert: Vishal Garg, the CEO notorious for firing 900 employees over Zoom before Christmas
The company, which gained notoriety last year after its CEO fired 900 employees over Zoom just before Christmas, expanded rapidly during the pandemic when interest rates were low.
Yet, in a letter posted on Better's website, the firm said Tuesday's layoffs were prompted by a "dramatic drop in origination volume due to rising interest rates," said Interim President Kevin Ryan.
"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. "This decision is driven heavily by the headwinds affecting the residential real estate market," he added.
Mortgage rates recently jumped again, rising to a level not seen since the summer of 2019. The 30-year fixed-rate mortgage averaged 3.92% in the week ending February 17, up from 3.69% the week before, according to Freddie Mac.
Rates are increasing because of high inflation and stronger than expected consumer spending. 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 also be eligible for extended medical benefits, severance and a "suite of services" to help them find a new job.