One day after announcing an amendment to its SPAC agreement, digital mortgage lender Better.com confirmed today that it is laying off roughly 9% of its nearly 10,000 person staff.
Doing the math, that amounts to about 900 people.
The company declined to comment beyond the following written statement from CFO Kevin Ryan: “A fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market.”
People familiar with internal happenings in the company, which is set to go public in the near future at a $6.9 billion valuation, told TechCrunch that a few factors drove the decision behind the staff reductions.
For one, the mortgage market is expected to contract pretty significantly after 18 months of rapid expansion driven by historically lower interest rates. Better has been vocal about its desire to build out its purchase experience and move beyond digital lending to help people find and purchase homes. It’s also working to expand value-added offerings like title and homeowner’s insurance as part of its product suite.
Bottom line, the company has “too many people in the wrong places,” according to our sources, who preferred to remain anonymous.
This also appears to be a case of technology replacing human labor. Better’s automation efforts means fewer manual process and a business that is more machine-driven, hence the need for fewer human resources.
The layoffs are primarily taking place in the U.S. and India, the sources said.
On Nov. 30, TechCrunch reported that the company was getting a cash infusion from its backers sooner than expected. Blank-check company Aurora Acquisition Corp. and SoftBank decided to amend the terms of their financing agreement to provide Better with half of the $1.5 billion they committed immediately instead of waiting until the deal closes.
No word on whether the company has been in a cash crunch, but an email from CFO Ryan to employees obtained by TechCrunch revealed that Better would have about $1 billion on its balance sheet by week’s end. It’s possible that the layoffs were a condition to getting that deal approved.
Note: Ryan Lawler contributed to this story
