Bumble, the dating app, let go of hundreds of employees,here is the reason behind the layoffs

Bumble, the well-known dating app, is undergoing major changes in its workforce. The company has announced its decision to lay off roughly 350 employees, which makes up about 37% of its staff. This action follows a disappointing first-quarter revenue and tough market conditions marked by a decrease in user spending. “Today, the company revealed plans to cut around 350 jobs globally. This move aims to better match its operating model with future strategic goals and to enhance operating efficiency.”

CEO Lidiane Jones announced that approximately 30% of Bumble’s workforce, totaling about 350 employees, would be laid off. Additionally, Bumble will undertake an app overhaul aimed at revitalizing growth. Jones mentioned that the short-term product roadmap will prioritize AI and enhanced safety features, along with functionalities tailored to attract younger audiences.

“We believe these measures will reinforce our fundamental capabilities and enable us to continue providing fresh and engaging user experiences that foster healthy and equitable relationships,” Jones stated during today’s earnings call. “While many users appreciate the current online dating paradigm of swiping and discovery, we also recognize a segment of users seeking greater flexibility to interact and meet people in a more natural and organic manner.”

Bumble, based in Texas, disclosed a net loss of $32 million on revenue of $273.6 million for the last quarter of the previous year. This shows progress compared to the same quarter the previous year, which had a loss of $159 million on revenue of $241.6 million. After this announcement, shares of the Austin-based company, recognized for its dating apps like Bumble, Badoo, and Fruitz, dropped over 7% in after-hours trading.

Bumble competes with the much larger Match Group, which is ramping up marketing to attract younger users amidst economic challenges like inflation and high borrowing costs, impacting discretionary spending.

Match Group recently projected lower-than-expected revenue for the current quarter.

According to a filing with the US Securities and Exchange Commission in 2022, an average of 40 million people monthly used Bumble, Badoo, or Fruitz. By the end of 2022, Bumble had over 950 full-time employees, with approximately 770 of them based outside the United States.

During a post-earnings call, Bumble’s CEO Lidiane Jones announced plans to revamp the company’s main app and improve its premium plus offering. Analysts predict Bumble will concentrate on boosting Average Revenue Per User (ARPU) growth and expanding its global market.

For the current quarter, Bumble projects revenue between $262 million and $268 million, contrasting with analysts’ average prediction of $277.9 million. The company also witnessed a rise in total paying users across its apps to 4 million in the fourth quarter, up from 3.4 million a year earlier.

Yet, fourth-quarter revenue amounted to $273.6 million, missing analysts’ projections of $275.3 million. The company unexpectedly reported a loss per share of 19 cents, in contrast to analysts’ anticipated profit of 12 cents per share.

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