Bumble revealed its decision to eliminate 350 positions, approximately one-third of its workforce, on Tuesday, as part of a strategic restructuring initiative. The company clarified that this reduction aims to realign its operating model with upcoming strategic priorities, as outlined in its recent earnings release.
The Austin-based company is looking to revamp its app to revive sluggish growth in paying users, whose numbers have slipped since late 2021. It also faces competition from industry heavyweight Match Group, which owns the Tinder and Hinge apps, among others, whose aggressive marketing tactics aim to capture Gen Z users.
As a result, Bumble’s Q4 2023 financial results fell short of Wall Street expectations, and shares declined in after-hours trading. The firm reported a net loss of $32 million on $273.6 million in revenue, up from the same quarter last year.
During the call, CEO Lidiane Jones stressed that Bumble would focus on creating new, engaging experiences that foster healthy, equal relationships. She noted that the app’s near-term product roadmap would feature AI integration, enhanced safety measures, and features designed to appeal to younger audiences.
Jones said these initiatives will require additional resources, and the company will need to increase its overall efficiency to continue driving the business forward. As a result, she anticipates that Bumble will incur one-time charges of $20 million to $25 million in connection with the layoffs, which are expected to be completed during the first two quarters of 2024.
The tech sector is undergoing consolidation and layoffs as investors demand higher efficiency and profitability from companies. Tech giants like Amazon and Google have announced significant layoffs in the past few months.
Bumble’s headcount of 950 employees includes around 770 individuals outside the US. The company plans to provide more workforce-related details in its upcoming annual report, which is set to be released this week.
During the earnings call, Jones emphasized that she was confident in Bumble’s long-term growth potential as it delivers innovative user experiences and fosters healthy relationships. She also mentioned relaunching the eponymous app and revamping its premium plus offering were vital initiatives.
Jones added that Bumble will leverage its strong brand and user base to drive market expansion in core markets. She also pointed to the growing demand for gender equality in the workplace, which she called a “societal and economic imperative.” During the call, Jones addressed several questions from analysts on the company’s strategy and outlook. She noted that the company would release its full Q4 2023 earnings report on Thursday morning.