The fintech Better.com became world famous last December for calling 900 employees to a Zoom meeting and firing them all at once, which meant that in just one minute they got rid of around 15% of their staff. .
That generated a wave of outrage due to the coldness and lack of tact of the company’s leaders in handling such a delicate situation, and just a week after that several managers resigned, the CEO (responsible for that video call) temporarily withdrew from his duties and what remained of the top leadership decided to do an audit on corporate culture and leadership.
After that, the waters calmed down for a while, at least to the public, but now we have learned that these mass layoffs were only the tip of the iceberg of a company drowning in problems. Just a month ago, Better.com embarked on an even bigger wave of layoffs, affecting some 3,000 workers, according to Techcrunch. On this occasion andThe medium chosen to communicate it was email..
And now that same medium has revealed the reason: the company is losing about 50 million dollars a month, as leaked by an internal Better.com source. That same source has reported that the company is going to offer its remaining employees in the product, design and engineering divisions the possibility of leaving voluntarily by paying them a 60-day severance pay and a private health insurance plan.
Better.com managers reportedly explained to their employees, again via email, that the current instability in the mortgage markets, with rising interest rates and changing conditions, is hurting them and this would have motivated them to go undertake its third massive downsizing in just five months.
In Spain it would be impossible
The layoffs that Better.com is undertaking can only occur in poorly regulated labor markets, such as the United States or India, countries where the company has made the largest workforce reductions. In Spain, although it is also possible to fire collectively, the law protects the worker much morethe process is longer and in no case can it be resolved with a simple video call or a mere email, as we already explained in Xataka.
To begin with, if a large company like Better.com – which had around 6,000 employees before the first dismissal – wants to take on an action of this nature and scale, it cannot simply notify those affected and proceed to fire them, since the Statute of Los Trabajadores states, in its article 51, that dismissing 30 workers or more in companies with more than 300 employees is considered a collective dismissal, a procedure governed by very strict and specific rules.
To proceed with a collective dismissal in our country, the company must first notify the workers or their representatives in writing (and by a means by which the receipt is accredited, such as a burofax) of its intention to initiate the process, open a consultation period and convene a negotiating committee, among other formalities, just to start dealing with termination of contractsaccording to the Ministry of Labor and Social Economy.
That writing must reflect the reasons why this decision is made and the date of termination. Once this is done, the employer can optionally call that person into a video meeting to dig into the details and approach the termination more tactfully. The document also has to be individual. In other words, it would not be possible to replicate in writing what the CEO of Better.com did in Zoom and write the same text to fire several workers and thus save time.
In Spain there has already been a case in which a telematic dismissal has been considered inadmissible because the employer has not accepted the legal procedure to do so, although in this case it was for using the WhatsApp instant messaging service. Thus, the Superior Court of Justice of Extremadura considered inadmissible the dismissal of an employee who was informed of the termination of her contract by the chat application because it was not considered a reliable means of communication and because it did not reflect the reasons for the dismissal, according to collects the Legal News portal.
In this way, the Spanish laws protect workers much more than the American ones, where verbal dismissal is considered legal, the procedures are fewer and the margins of mass dismissal are wider.
George is Digismak’s reported cum editor with 13 years of experience in Journalism