Better.com Leadership Resigns After Layoffs

Better.com Faces Further Leadership Departures

Recent developments indicate ongoing challenges for Better.com, as the company experiences further scrutiny and personnel changes.

Resignations of Key Executives

Sources with knowledge of the company’s internal operations have informed TechCrunch that Patrick Lenihan, Vice President of Communications, Tanya Gillogley, Head of Public Relations, and Melanie Hahn, Head of Marketing, have all tendered their resignations. This news was also reported by Insider.

Backlash from Layoff Handling

The resignations follow significant criticism directed at CEO and co-founder Vishal Garg regarding the manner in which approximately 900 employees were laid off. Concerns were raised about the use of a Zoom meeting for the dismissals, as well as perceptions of a lack of sincerity from Garg.

The incident sparked widespread online reaction, with memes and commentary regarding Garg’s actions appearing on platforms like TikTok.

Financial Context and Future Valuation

These events occurred shortly after Better.com secured a $750 million cash infusion through an amendment to its agreement with Aurora Acquisition Corp., a special purpose acquisition company (SPAC), and SoftBank. Subsequently, the company reduced its workforce by roughly 9%, impacting around 900 of its 10,000 employees.

The company anticipates going public with an estimated valuation of $6.9 billion.

Allegations of Employee Misconduct

Vishal Garg also communicated to Fortune that the company had accused “at least 250” former employees of time theft and misappropriation of company and customer resources, alleging they were only working approximately two hours per day.

Following the layoffs, Garg addressed the remaining staff in a livestreamed meeting, outlining his vision for “Better 2.0,” characterized by a “leaner, meaner, hungrier workforce,” as detailed in a leaked recording obtained by Insider.

Seeking Comment

TechCrunch has contacted Better.com for a statement but has not received a response as of this writing. Requests for comment directed to the resigning executives have also gone unanswered.

Past Concerns Regarding Garg’s Leadership

Concerns about Garg’s management style predate these recent events. A Forbes report from last year revealed an email sent by Garg to employees containing harsh language: “HELLO — WAKE UP BETTER TEAM. You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS and…DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME.”

The same Forbes article detailed multiple lawsuits filed against Garg by entities such as PIMCO and Goldman Sachs, alleging “improper and even fraudulent activity” in previous business ventures and the misappropriation of “tens of millions of dollars.”

Market Conditions and Layoff Rationale

A decline in mortgage refinancing activity is believed to have contributed to Better.com’s decision to reduce its workforce.

In April 2020, Better.com announced plans for aggressive hiring, citing increased demand for mortgage refinancing driven by historically low interest rates. At the time, reporting for Crunchbase News indicated that an internal memo from Garg revealed plans to hire approximately 1,000 employees throughout 2020 to meet growing customer needs.

Industry Trend of Executive Departures

Better.com is not alone in experiencing executive turnover ahead of a public offering. Insider reported in 2019 that over a dozen top officials had left WeWork amid internal disputes and uncertainty surrounding its initial public offering (IPO) plans.

Additional Information

Reporter’s note: Following the initial publication of this report, it was learned that Garg issued an apology to current employees, and the SPAC process is likely to be delayed. Further details can be found here.

https://techcrunch.com/2021/12/03/squares-better-com-name-block-is-butter-y-smooth/