In a new SEC filing, the mortgage lender points to actions by CEO Vishal Garg as reasons that areas of company culture “require improvement.” Steep losses are expected in Q4.
If Better can’t fix what it calls “issues with our culture,” it will struggle to replace a list of departed senior managers that steadily grows, the company said in a new filing late last week that also shed light on ongoing financial struggles.
The attempt at company culture repair includes the move to hire a president — a new role within the company — as well as a chief human resources officer and board chair. Kevin Ryan, the company’s chief financial officer, is acting as interim president until a full-time hire is made. Richard Benson-Armer, an operating partner at Activant Capital, has been brought in to oversee human resources.
“We have just begun to take steps to identify some of the issues with our culture and to implement organizational changes in response thereto,” the company said in the document, which was filed with the U.S. Securities and Exchange Commission on Thursday.
In addition to shedding light on widespread problems attributed to company culture and acknowledging the company would struggle to replace a growing list of departing leaders if that culture doesn’t improve, the report also showed the company expects to report steep losses in the fourth quarter of 2021.
The changes come after a law firm hired by Better to conduct an internal review identified areas of the workplace culture that “require improvement, many of which relate to actions taken by the Better Founder and CEO.”
Better has been in the spotlight since December, when a video of CEO Vishal Garg laying off 9 percent of the company on a Zoom call ahead of the holidays went viral.
Since then, the public has gotten a glimpse inside issues with the mortgage lender and brokerage as the Better leadership team has struggled to carry out plans to go public through a merger with a special purpose acquisition company.
Key members of Better’s leadership team have also exited the company in recent weeks. The latest is Christian Wallace, head of the company’s real estate division.
Wallace’s departure followed voluntary resignations by members of the company’s marketing, communications, design and growth leadership teams.
A member of the company’s management team who spoke with Inman anonymously said Garg’s involvement in day-to-day operations undermined senior leadership and divided the team. Following Garg’s move to dismiss nearly 900 employees late last year, members of leadership hoped Garg would step out of his role as CEO.
“What I would have said we wanted was removal of Vishal in his position,” the employee said. “It didn’t necessarily mean remove him from the company by any means. He just needed to be removed as CEO or acting CEO.”
Garg returned from a leave of absence in January, and the resignations soon followed.
Creating the new role of president could be a move to set up a type of firewall between Garg and the company’s management teams.
But improving on the poor company culture is just one battle confronting Better, which will likely report steep losses from the final three months of last year.
Better expects to report loses in the fourth quarter of between $167 million and $182 million. That would exceed losses of $107.4 million in the third quarter, and it could portend cost cutting.
“We implemented the December 2021 workforce reduction to be more sustainable going forward,” the company said, “and are also considering other operational efficiencies and cost reductions.”
The company didn’t immediately respond to a request for comment.
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