Amid a shrinking mortgage market and delays in its plan to go public, digital mortgage lender Better.com made another round of layoffs on Friday.
That’s the fourth workforce reduction since December 2021, when the company’s Chief Executive Officer Vishal Garg gained infamy for laying off 900 employees in a Zoom meeting. On March 8, Better cut 3,000 jobs, roughly 35% of its staff in the United States and India. The company instituted its third major layoff on April 19.
“We’re making prudent decisions to adjust to market dynamics so that we can continue to serve our customers for the long-term,” said a Better.com spokesperson to HousingWire. The spokesperson declined to comment further, did not provide the number of employees affected or their job positions, but said the company offered a severance package.
So far, it’s unclear the size of the workforce reduction. TechCrunch first reported on 250 jobs cut across the U.S. operations, citing one source.
“Better.com is trying to think through how to best reduce the costs where necessary and address the cash burn,” a person familiar with the company’s decisions told HousingWire.
The lender’s latest step was to change its leave of absence policy, reducing the time employees can be absent from work “to better align with industry standards,” according to the Better.com spokesperson.
The digital mortgage lender financials have deteriorated this year. Better.com reported a $221 million loss in the first quarter of 2022, compared to a $137.5 million profit during the same period in 2021.
Its financial backer, SoftBank, made a $750 million cash infusion last year out of a total of $1.5 billion in committed funding.
Another $750 million will be doled out after the company goes public via a special purpose acquisition company called Aurora Acquisition Corp., sponsored by Novatar Capital. The transaction was expected to happen in Q4 2021.
But without reliable access to purchase business, conditions look bleak for Better, and few, if any, Wall Street analysts believe Better.com can go public in this cycle.
On Aug. 18, When asked about the SPAC deal during an interview with Bloomberg TV, Garg said, “We’re evaluating all of our opportunities.”
He added: “And again, I can’t comment publicly on it. All I can say is that we remain committed to achieving greater capitalization so that we can have the funding to serve our customers. And we’re open to all the different options out there that enable us to continue to be really well capitalized.”