Bumble cuts ~350 employees as dating apps face a reckoning

Picture Credit: Salesforce

Bumble, a once-powerful pressure in on-line relationship, is dealing with a reckoning.

The corporate posted weak This autumn 2023 outcomes right this moment displaying a $32 million web loss and $273.6 million in income. Whereas up from the identical interval a 12 months in the past, earnings got here in beneath Wall Road expectations and had been paired with a disappointing Q1 2024 forecast — sending Bumble’s inventory tumbling ~10% in after-hours buying and selling.

Bumble’s taking drastic motion to stem the bleeding.

CEO Lidiane Jones introduced that 37% of Bumble’s workforce, or about 350 workers, can be let go, and that Bumble would embark on an app overhaul focused at reviving development. The near-term product roadmap will give attention to AI and enhanced security measures, Jones stated, in addition to options designed to attraction to youthful audiences.

“We consider these actions will strengthen our foundational capabilities and allow us to proceed delivering new and fascinating consumer experiences that create wholesome and equitable relationships,” Jones stated throughout a name on right this moment’s earnings. “Now we have a variety of customers right this moment that love the paradigm of the net relationship — swiping and discovery and looking — however there’s additionally a set of customers that need extra flexibility to have the ability to expertise and uncover individuals in a extra natural and pure method.”

Bumble is dealing with challenges on a number of fronts as its essential rival, Match Group, which owns Tinder, Hinge and Match amongst different relationship apps, goes after Gen Z customers with more and more aggressive advertising and marketing techniques.

Bumble’s payer development has being slowing since late 2021. And lots of the capabilities launched in Bumble’s apps up to now 18 months haven’t resonated with the consumer base, Jones stated in the course of the name.

Bumble has additionally needed to contend with inner organizational shifts within the wake of founder Whitney Wolfe Herd stepping down as CEO final November and transitioning into the position of govt chair. Jones, who joined from Slack in January, appointed 4 new C-suite executives at Bumble within the final week alone.

Slower development isn’t distinctive to Bumble. Courting apps usually — together with Match Group’s — have seen declining income from customers reluctant to fork over money for premium add-ons. In keeping with a 2023 Pew Analysis study, whereas 41% of customers age 30 or older have paid for relationship apps, simply 22% of customers beneath 30 — the demographic seen as most fascinating — have accomplished the identical.

Platforms have tried to fight the decline in varied methods. Tinder is pivoting to give attention to long-term relationships — a prime precedence for Gen Z, which polls present are less interested in informal relationships and hookups. Hinge amongst others, in the meantime, is embracing the transfer to IRL meetups, launching a fund and promotions to sponsor singles occasions.