Better.com, the troubled online mortgage provider, stated on Tuesday that it is taking the “painful step of simplifying” its operations and laying off around one-third of its personnel, or approximately 3,000 people.
The firm, which sprang to prominence this year after its CEO dismissed 900 workers over Zoom shortly before Christmas, grew swiftly during the epidemic when loan rates were low. However, according to a message placed on Better’s website, the layoffs on Tuesday were caused by a “dramatic decline in origination volume owing to higher interest rates,” according to Interim President Kevin Ryan.
“Unfortunately, this means we must take the tough step of further restructuring our operations and significantly decreasing our employees in both the US and India,” Ryan wrote. “This decision is largely influenced by the challenges influencing the residential real estate market,” he continued.
Mortgage rates have recently risen to levels not seen since the summer of 2019. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.92 percent in the week ending February 17, up from 3.69 percent the previous week. Rates are rising as a result of high inflation and higher-than-expected consumer expenditure.
Better stated, impacted workers will be contacted individually over the phone, perhaps preventing another public relations nightmare like the one that occurred following CEO Vishal Garg’s decision to conduct a mass firing over Zoom.
Better.com was reportedly worth up to $6.9 billion. In 2020 and 2021, the firm was named first on LinkedIn’s Top Startups list. According to Bloomberg, the Softbank-backed mortgage lender has been aiming to go public, but those efforts have been put on hold owing to the repercussions from Garg’s handling of the December layoffs.
