How Better.com Destroyed Their Brand in One Day & How You Can Avoid the Same Mistakes
Better.com could use a better week.
The Daily Beast reported on Wednesday that mortgage startup Better.com canned 900 employees ahead of its upcoming public offering via SPAC. A video obtained by TechCrunch shows CEO Vishal Garg announcing on a video conference that 15% of staff has been terminated, effective immediately (though the company has since said the figure is closer to 9%). Employees on the call were the ones dumped.
Better.com has some work to do when it coms to getting its employer brand back on track
Ice cold. And bang in the middle of the cash-sucking holiday season.
It’s thought that the mass layoff is meant to make Better.com look shinier as it goes public, perhaps even being a condition of its SPAC deal. “A fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market,” said CFO Kevin Smith in a statement loaded with graceless business jargon. It sounds like they got a big wad of cash from investors for laying off a bunch of staff.
Employees as collateral. The stuff of employer branding nightmares.
Axing hundreds of workers may have polished the company for investors, but they’ve completely wiped their reputation in the job market. And when reputation suffers, company value suffers.
If Better.com is going to hire anyone in the coming year (or years), they’re in for a slog. This is neither the first nor the last company to lay off a sizable chunk of workers, and companies survive it all the time. So, how does a company in this position rebound?
Stop and think before you deliver the news
Layoffs will make you a topic of conversation in your job market, and if you’re a big company, it’ll put you in the news. Insofar as you can, prioritize the laid off workers.
Don’t make the mistake Better.com made by delivering the layoffs in an impersonal video. If you have to let go of someone, have the decency to deliver the news via manager in a face-to-face meeting or video call.
Give terminated workers as much runway as possible—notice, severance, health coverage—whatever you can to help them out until they find something new.
Give terminated workers flexible schedules as they transition out. If you’re giving your staff notice, don’t expect them to be in the office and working a full schedule. They have to be out there finding new jobs, so give them the leeway to do so.
Invest in who’s left
Fight the urge to go on a frantic PR crusade. Job seekers aren’t likely to trust the company’s word for the foreseeable future, so the remaining employees will be your best asset. Make natural evangelists of employees by making their experience the best it can be: Focus on retention.
Proceed with caution. You just fired their colleagues, so not only are your remaining workers feeling righteous anger on behalf of their friends, they’re worried that they’ll be next. Make leadership accessible to answer questions, but don’t be surprised when more employees start jumping ship.
Watch out for burn out. The remaining employees will be shouldering a lot as they take on the work that once belonged to their colleagues (and as people managers give recommendations to their former direct reports), so set realistic deadlines, provide plenty of PTO and flexibility, and be patient with learning curves.
Recognize good work. Thoughtful and individualized employee recognition is a low cost, high impact way to retain and engage staff.
Give them a reason to stay. Invest in employees’ career development, give them the opportunity to make lateral moves within the organization, and provide clear paths to promotion.
Emily McCrary-Ruiz-Esparza writes about workplace culture, DEI, and hiring. Her work has appeared in Fast Company, From Day One, and InHerSight, among others.
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