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How Better.com and its CEO left laid-off workers out to dry

For former employees of the once high-flying mortgage startup, getting fired was only the beginning in a nightmare seemingly without end.

How Better.com and its CEO left laid-off workers out to dry
[Source Images: Getty]

At the start of December, “Amy” had just received a raise, a bonus, and a performance review applauding her excellent work as an operations associate at Better.com. So when she became one of the 900 employees who was unceremoniously laid off on the mortgage company’s now-infamous Zoom call that same month, she figured she at least deserved a shot at making the case for why she should be rehired. As it happened, CEO Vishal Garg was encouraging stand-out employees to do just that.

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“When Vishal said, ‘If you feel like this was a mistake, please reach out to me,’ I sent him an email explaining that I loved working for Better and that I was a high-performer,” she tells Fast Company. “But I never got a response.”

Amy, who has been given a pseudonym to speak without fear of retaliation, was about to have bigger problems than the CEO ghosting her by email. Her severance check arrived, and based on her calculations, which appear accurate from Fast Company‘s review of the paystubs, it was nearly $5,000 short. “My husband and I were like, ‘We’ll have Christmas, then I guess just return everything,'” she says.

She emailed HR and payroll several times asking them to walk her through their math. Four months later, she’s still waiting on their answer. In January, she sent a demand letter to Better’s World Trade Center offices by certified mail. Better hasn’t responded to that either.

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In late April, though, it did mail her a free coffee tumbler.

“At this point,” she says, “I think they’re doing this on purpose.”

Better.com CEO Vishal Garg. [Photo: Wikimedia Commons]
Many former Better employees across a number of departments—sales, operations, design, engineering—say they’ve come to a similar conclusion. Fast Company has spent the past month hearing dozens of their stories and reviewing hundreds of emails, texts, and posts from LinkedIn and the anonymous workplace-messaging app Blind. (Some former employees spoke to us under the condition of anonymity, in which case their pseudonym appears in quotes. Others agreed to be quoted using their full names.) These workers describe problems that they say run from getting shorted on severance payments, to not being properly enrolled in COBRA insurance, to having unemployment claims denied because states say their wages were never reported—problems that, in turn, have been exacerbated by conflicting promises from Better’s leadership and an unresponsive HR and payroll department.

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Former employees have formed their own support networks on Blind and Slack, where one group now has over 900 members, to crowdsource problems typically resolved by HR. These workers, most speaking publicly here for the first time, say they’re ready to move past Better, but don’t feel like they can until their severance, health insurance, and unemployment benefits issues are resolved. Their stories underscore how a company that became infamous for its mismanagement of multiple rounds of mass layoffs continues to fall short of its obligations in their aftermath.

Reached for comment and presented with a detailed list of the issues raised by former employees, Better declined to comment on the record for this story.

The fall of the mortgage company, once seen as an industry disrupter and backed by SoftBank and Goldman Sachs, has come to serve a cautionary tale about the consequences of being a startup that pursues growth at all costs—as well as a case study on what not to do when that chase backfires. Public backlash immediately followed the viral December layoffs, which Garg defended in a subsequent Zoom meeting where he told remaining employees that their jobs would get harder but “you will not be allowed to fail twice.” “Think again,” he told any workers who doubted that Better was carefully monitoring their productivity, a reference to software installed on work devices that tracked mouse movements. He also got onto Blind where workers were growing alarmed and bitter, and assailed their ex-colleagues as “stealing from you and stealing from our customers.”

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In March, Better surprised workers with another round of layoffs—over 3,000 this time. Then on April 18, it went for round three, terminating over 1,000 more employees.

Maygin Rye, a loan consultant, lost her job during the March layoffs, but is still dealing with the aftermath. She needed dozens of hours of licensing courses reimbursed, but HR sent her the same locked expense form, which required her canceled Better credentials to open, three times. A week before her old Better health insurance policy was set to lapse, her son’s doctor’s office told her it was inactive (a clerical mishap, she learned, after some frantic phone calls, but she got no help from Better). “You’re making me do a full-time job,” she remembers thinking.

Once questions started circulating about severance being underpaid, Rye double-checked her paystubs—only to calculate a number $2,600 higher than Better’s. Suspicious, she dug into her past paychecks, and believes Better may have underpaid her on those as well. “Three or four were short hundreds of dollars,” she tells Fast Company. “My thought was, you laid us off? Fine. If my severance was right, all would be well. But it isn’t.”

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On March 8, mortgage underwriter Joshua Knezinek learned that he’d lost his job the same way that many Better employees did: not from any official notice, but because payroll accidentally started depositing severance checks into affected workers’ bank accounts early. A big deposit unexpectedly appeared in Knezinek’s account around midnight. He and other colleagues started Slacking and exchanging texts, wondering if they were being laid off.

Around 9 a.m., Better sent an email informing terminated workers to expect a phone call that day, followed by an email summarizing the exit terms: 60 days of severance and three months of COBRA insurance. After realizing that a number of pregnant individuals were about to be laid off—and buoyed by the assumption he was operating on borrowed time—Knezinek called out executives in a public Slack channel, imploring them to think hard about how losing their health insurance would affect expectant parents. “Extend their medical coverage on an individual basis to carry them to term and cover postnatal care,” he begged.

Other colleagues with serious health conditions were at risk, too—including Jody Anderson. A 30-year veteran of the industry, she was among Better’s top loan processors; in February, her last full month at Better, she won an award for having her team’s shortest loan-processing time and posted a 100% customer-service score. She’s also a mother of two in the middle of fighting breast cancer. “They threw me out and said I’ll have insurance until June, but after that I’m on my own,” she says. “Well, I’m in a battle that doesn’t have an end date.”

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Senior product designer Eric Blattberg, who’s had chronic pain since 2020, knew what lapsed insurance coverage could mean. He grew more upset as stories circulated. Not just about expectant parents, but about veterans, people employed on H-1B visas, and workers like Anderson who were panicking about losing their health insurance more than their jobs.

Starting March 8, Blattberg launched a public social-media campaign lobbying Better to expand both severance pay and benefits for at-risk colleagues. His posts on LinkedIn quickly drew millions of views to Better’s decision not to protect expectant workers or provide longer-term care for employees with serious illnesses, like Anderson.

At first, the negative PR seemed to be working. On Slack, Garg addressed a comment that Blattberg had posted about laying off pregnant workers. “I have been off social media,” Garg wrote, “so had assumed this had already been resolved.” His next pledge drew dozens of applause and heart emojis: “We will pay for current health insurance through term and for 36 month[s] after till the kid is enrolled in 3-k. Will pay for it personally if better can’t.” He asked Blattberg to share this news with “all those on social media … so the message can be out there.”

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Garg also told Blattberg, “Appreciate all your efforts in getting attention to this issue.” However, two days later, Blattberg got invited to his own private Zoom call where Better told him he was fired.

On that call, Better HR explained Blattberg was being “involuntarily terminated” because after Garg asked him to share the insurance coverage news on social media, Blattberg created a “security risk” by screenshotting their Slack exchange and posting it on LinkedIn.

Blattberg had already accepted a new job offer and given Better his notice anyway. But he has continued to criticize the company for forcing at-risk workers to publicly disclose their private health conditions to ensure they have care, and to demand his old employer “do the right thing for the thousands of [other] people it laid off.” He argues all of these workers deserve coverage beyond three months of COBRA to help them “get back on their feet.”

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The company also began to distance itself from Garg’s Slack pledge. It told the media that expecting parents would get nine extra months of healthcare, for a total of one year, instead of the 36 months Garg had promised. Meanwhile, it tried to rehire the 19 expecting workers who had stepped forward. Several refused, and some new employees claimed Better had overlooked them. “I too am expecting and wasn’t extended this grace,” one wrote on LinkedIn, adding: “I don’t know who I can trust.”

Meanwhile, Anderson notes that, despite a promise otherwise, she didn’t hear from Better after the March 8 layoffs. “All I knew is I had a computer that didn’t work and an extra 15 grand in the bank,” she says. HR finally called on March 11, three days later, once Blattberg’s LinkedIn post on her situation went viral and employees began pressuring management to act on Anderson’s behalf. The person who called her didn’t explain why Anderson had been let go, but verbally offered to cover her COBRA premiums for 12 months, versus the three months being offered to other ex-employees. This failed to stretch to the end of even her oral chemotherapy but was an improvement. For peace of mind, Anderson asked Better to memorialize the extension. “As I sit here now,” she tells me, “I still have nothing in writing.”

Multiple ex-employees tell Fast Company that Better didn’t offer them any instructions on how to enroll in COBRA—which kicked in April 1—beyond one generic message in early March. It advised that if they hadn’t received a packet in the mail by March 28, they should follow up with a third-party provider, called Navia Benefits, not Better HR.

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“Suzanne,” a sales employee who requested anonymity because she signed a nondisclosure agreement, says that she sent emails to HR for weeks seeking clarification after she was laid off in March. No one responded. She did receive a letter from Navia on March 28. It addressed setting up premium payments, but contained no benefits packet, which left her even more confused. She called Navia, and says a woman informed her that it was Better’s job to send that packet with benefits elections. Suzanne says the woman told her she was glad that Suzanne called, because she only had a few days left to select benefits.

As the month drew to a close, the Blind and the ex-Better Slack channel were flooded with anxious commenters wondering what they needed to do to ensure their coverage didn’t lapse. Users were posting that their packets still hadn’t arrived, and HR was leaving the process to guesswork. “Can someone explain this to me like I’m 5?” one person wrote on Blind hours before COBRA was set to begin. “HR has been ZERO help.”

Blattberg posted a poll on LinkedIn at the end of March asking how many ex-Better workers had received COBRA signup instructions. Three people responded yes; 78 said they’d received nothing.

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“We’re not just fixing a broken system,” Better’s ads have pledged, “we’re improving it.” Its business model has been pitched as disruptive—lower loan rates, naturally, but also a digital-only process touted as being less susceptible to the racial biases that have plagued the mortgage industry. And it has promoted the idea that it’s different internally too, an inclusive workplace, among Comparably’s best in 2020 for women and diversity, where team members could excel despite having limited professional experience and possibly not even a college degree. A place where they could build stable careers, instead of facing a commission-based grind.

Prior to the layoffs, Better was valued at as much as $7.7 billion, and was about ready to go public through a SoftBank-backed SPAC merger. It was LinkedIn’s best-ranked startup for two years running, and topped Fortune‘s 2021 list of best small- and medium-sized businesses to work for. This was part of why Better grew so fast, from 4,000 workers in 2020 to 9,200 by last September.

A still from the leaked Zoom call where CEO Vishal Garg let Better.com employees know that he had just laid off a great number of their colleagues.

Despite this reputation publicly as an enlightened workplace, all the workers we spoke with expressed frustrations with Better’s HR inconsistencies. On one hand, employees laid off on Zoom described their work devices going dark almost the moment the call ended. Then on the other, many then had to hound HR because Better never sent them the postage-paid boxes it promised to return their shut-off devices.

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When Garg later accused sacked employees of stealing from Better and its customers, he pointed to the data the company had obtained using specially designed employee-performance tracking software. “At least 250 of the people terminated were working an average of 2 hours a day while clocking in 8 hours+ a day in the payroll system,” he wrote.

Employees offer an alternate explanation for Garg’s claims of low productivity. The strain of fast growth had made Better’s software clunky, and efforts to streamline it starting in mid-2021 created new problems. “It broke a bunch of stuff,” one worker familiar with the software tells me. “It was like somebody came in with a scythe, then afterwards salted the earth, and it was up to the teams to figure out how to get everything working again.”

For example, he says it used to take less than two minutes to spin up projects. “Now, it would take four hours, and I basically just had to sit there, staring at it,” he explains. “When Vishal said people were working two-hour days and stealing from the company, some of them were just waiting to get stuff spun up, like me.”

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As issues with HR and payroll have stacked up, Garg has yo-yoed between publicly blaming and threatening employees, evoking a fatalistic tone reminiscent of the one that overtook WeWork just before Adam Neumann lost control. The rumor mill is running rampant. In recent weeks, employees told Fast Company they’ve heard that Better’s India office is allegedly shutting down to stymie losses further, and that more layoffs are imminent in May. Meanwhile, Better is reportedly still hemorrhaging $50 million a month, yet none of Better’s top executives have taken a pay cut since the December layoffs began. CFO Kevin Ryan, for instance, still earns an annual salary of $1 million.

SoftBank is also said to have quietly signed a side letter agreement tying Garg’s control of Better, if it ever goes public, to his ability to settle the lawsuits by Goldman Sachs, PIMCO, and other investors in his business ventures that have accused Garg of committing fraud and misappropriation of billions of dollars.

In the meantime, a new aggrieved group has emerged—ex-workers who claim they’re being denied unemployment benefits because their state can’t find any record of their wages. “Sophia,” a Houston-area home adviser laid off in March, says that she called the Texas Workforce Commission to appeal her denial, and an agent called the situation “really odd” at first. “Then the woman called back and said, ‘A lot of people are having this issue with your company in Texas,'” Sophia tells Fast Company. “She was also like, ‘And we can’t get a hold of Better HR. They aren’t replying at all.'”

The Texas Workforce Commission tells Fast Company that Better should have paid unemployment taxes for its Texas workers, and confirmed that for a W-2 employee who earned as much as Sophia, it would only deny a claim if the employer failed to report that worker’s wages, or if it reported them to the wrong state. Texas has opened an investigation into Sophia’s situation, but one month in, she has not yet seen a resolution.

Over in Illinois, at least one ex-worker says the state unemployment agency informed them that Better didn’t report their wages, either. Employees in New York have made similar claims. (The Illinois Department of Employment Security declined to comment, while the New York Department of Labor said it cannot disclose if a company is paying unemployment insurance taxes.)

However, there is one offboarding task Better took more seriously—pressing ex-employees to sign exit NDAs. For a while, someone in HR was emailing Blattberg a copy via DocuSign several times a week, until he marked the messages as spam and blocked the sender. His agreement offered no incentive, but if workers laid off in March and April sign theirs, their severance jumps by one-third.

A non-disparagement agreement might be in Better’s interests, but it ultimately does nothing for ex-workers. In fact, when Garg doubled down and told the media that while his comments about employees stealing company time “could have been phrased differently, but honestly the sentiment is there,” other companies were watching.

During job interviews after she was laid off, Amy says that more than one hiring manager has admitted to her that the negative perception of former Better employees publicly expressed by Garg was worrying. “They’d say, ‘We know you’re one of the people Better laid off, and we’re a little concerned because the CEO made comments about these employees stealing time and not being productive,'” she says. “I worked so, so hard for my professional reputation, and now it’s like, how many job offers did I miss because of what he said?”

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