lays off 9% of staff as the SoftBank-backed company prepares to add $1 billion to its balance sheet ahead of a SPAC merger

December 2, 2021, 6:05 PM UTC

The layoffs were swift. 

CEO of financial startup, Vishal Garg, summoned employees onto a Zoom call the afternoon of Dec. 1, and announced they were being let go. The layoffs—impacting approximately 9% of the company’s staff, about 900 people—would be effective immediately. Then the affected employees’ corporate accounts promptly went dark.

“I had people I was talking to on Slack,” says a current employee, who spoke with Fortune on condition of anonymity. “Their Slacks were just deactivated two minutes after.”

The layoffs came as a shock to employees, say one current and one former staffer who spoke with Fortune. Better had been actively hiring—and it’s still actively hiring, according to CEO Garg’s LinkedIn profile, open positions listed by the company, and a current employee. Only the day prior, Nov. 30, CFO Kevin Ryan had sent an email to all company staff with “some really exciting news,” internally publicizing that Better had revised its SPAC merger agreement to secure $1.5 billion in debt and convertible notes from Novator Capital, the SPAC’s sponsor, and SoftBank Group. The company has also raised nearly $2.5 billion in equity from venture capital firms as of mid-May, according to Pitchbook data.

“Surviving is winning and capital ensures survival,” Ryan wrote in his Nov. 30 email, which was reviewed by Fortune. “Thank you to the entire team for three weeks of around the clock work and to everyone for sticking with us during this deal.” The company expected to have $1 billion in cash on its balance sheet by the end of the week, Ryan wrote. 

But hundreds of the company’s approximately 9,200 employees wouldn’t be around to see that capital infusion, and they were let go across the U.S. and India on the Dec. 1 call. (A spokesperson confirmed to Fortune that no employees in the U.K. were impacted).

The Zoom call, which was scheduled for 12:15 ET Wed., according to a former underwriter who was on the call, lasted less than 10 minutes.

“[Garg] said it was due to the fact that … We didn’t have a lot of loans coming in because business had dropped, and that is why we are all being impacted,” says one former staffer, who joined via phone, and is now unemployed. 

Business has slowed down for mortgage companies in recent months as housing sales have dropped from their pandemic high. Mortgage applications have dipped

While they acknowledged that demand for mortgages has shrunk, one current and one former employee who spoke with Fortune say the layoffs weren’t handled well. Following the announcement, Garg hosted a subsequent call for remaining still-employed Better staffers in which he stated that he should have terminated staffers earlier and that he would be keeping a close eye on productivity, according to two people who were on the call. 

The company is planning to go public via a merger with Aurora Acquisition Corp., a SPAC, expected before the end of this year, in a deal it says will value the company at $6.9 billion. The mortgage company had been in the process of reorganizing its business, according to the two employees, who say that Better had been outsourcing more and more labor to employees in India.

Impacted employees were offered four weeks severance, according to two people familiar with the matter. India employees received three months of severance and no benefits, a person familiar with the matter tells Fortune.

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