Better’s CTO Accepts Separation Plan After Months of Layoffs

Embattled online mortgage startup Better has revealed that CTO Diane Yu has accepted a voluntary separation plan and will step down from her current role.

However, according to an internal memo obtained by Bloomberg, Yu won’t leave the company altogether, and instead will transition into an advisory role.

Yu has been with Better for a little over a year, joining in January 2021 after serving as the CTO for Advanced Advertising at Comcast. Before that, she was the co-founder and CTO of FreeWheel, an advertising technology startup that the broadcasting giant bought in 2014 for $360 million. She also spent almost a decade in engineering leadership roles at DoubleClick.

In a memo, CEO Vishal Garg praised Yu’s work leading Better’s engineering team and said her focus had been on growing the company’s team, which is no longer the company’s priority. Garg added that the company is moving away from “rapid scaling” and will now “streamlining operations” with a focus on research and development.

In a LinkedIn post about the voluntary separation plan, Yu revealed that she wouldn’t be alone in leaving Better. She said, “I am reaching out to my network to let you know that some of Better's great engineers will sign up for this program due to their own personal situations.”

She later commented on her post to thank her network for the outpouring of support and job opportunities for Better engineers. “Your support has been so overwhelming that I have not been able to keep up with the responses. I plan to discuss with my team how to connect each individual properly as they sign up (sic) the offer. Stay tuned. We will be mining my inbox and the comments below to get back to you. Thanks again,” she wrote.

The separation plan is available to Better’s corporate, product development and engineering employees. Those eligible have at least seven days to accept the offer, which includes 60 days of severance and health insurance.

Yu is the highest-profile executive to accept Better’s voluntary separation plan so far. Her decision follows months of executive departures and multiple waves of layoffs.

In December 2021, Better shot into headlines after CEO Vishal Garg abruptly let 900 employees go via a Zoom call. He then criticized the departing employees, saying they were stealing from the company, which spurred several high-profile executives to quit. Later, the company apologized for how the layoffs were handled, and Garg stepped back while an internal review was conducted, leaving CFO Kevin Ryan to lead day-to-day operations.

Garg rejoined Better in January 2022, and in March, the company announced another round of layoffs, cutting an additional 3,000 employees.

Better’s rounds of layoffs and recent voluntary severance package are part of its plan to reduce costs amid an uncertain mortgage market. The move is also likely a play to lengthen its runway as potential funding sources tighten their belts—the first quarter of 2022 saw venture capital funding dip by 19% compared to the last quarter of 2021.

Moving forward, after months in the headlines, Better’s reputation among tech workers has likely taken a massive hit. The company may find it hard to recruit talent as it looks to replace senior leaders who have left, like Yu, and recruit R&D talent, especially while Garg is still in charge.

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