Bumble, the beleaguered dating app whose stock has lost 90% of its value since going public in 2021, is axing 30% of its workforce.
The company announced in a regulatory filing Wednesday that the layoffs amount to 240 positions and will save Bumble $40 million annually. The workforce reduction “realigns its operating structure to optimize execution on its strategic priorities,” with the company reinvesting a “substantial majority” of the money saved into new products and tools.
It’s the latest warning sign that younger users are growing frustrated and abandoning online dating, forcing companies like Bumble to search for new ways to innovate, including putting a stronger emphasis on using artificial intelligence to find matches.
“These decisions were not made lightly, and we are deeply grateful for the contributions of every employee impacted,” a Bumble spokesperson said in a statement to CNN. “Our focus now is on moving forward in a way that strengthens our core business, continues to serve our members effectively, and positions us for future growth.”
Bumble’s stock has collapsed since going public four years ago, prompting founder Whitney Wolfe Herd to return to company in March after a two-year hiatus.
Herd was blunt in an interview with the New York Times, saying that Bumble “needs me back” and that “watching it fall from its peak has been very hard.”
Revenue declined nearly 8% in Bumble’s most recent quarter, and premium paid subscribers declined by 1%. The company will release its next earnings report in August.
News of the layoffs sent Bumble’s (BMBL) stock about 17% higher.
Beyond Bumble, rivals like Match Groups’ apps Hinge and Tinder are also struggling. In May, the company reduced its workforce by 13%, amounting to about 300 employees. Tinder is rolling out new features to keep users engaged, including a “double date” feature that allows users’ friends to pair up and go on group dates.
However, there’s one dating company that is having success. Grindr, the LGBTQ+ oriented app, has seen its shares grow more than 115% over the past year. It’s evolving beyond its location-based, hook up-centric grid format with new features aimed at making it a more formal dating app — a bid to expand its user base and attract more advertisers.
Read the full article here