Bumble, the online dating platform, has announced a significant restructuring plan. This involves laying off 350 people and possibly the elimination of those roles. This accounts for approximately one-third of its workforce.
The company stated in an earnings release that this reduction aims to realign its operating model with its future strategic priorities.
Bumble, headquartered in Texas, reported a net loss of $32 million on revenue of $273.6 million during the final quarter of last year.
This marks an improvement from the previous year’s same quarter, which saw a loss of $159 million on $241.6 million in revenue.
Following the announcement, shares of the Austin-based company, known for its dating apps like Bumble, Badoo, and Fruitz, experienced a more than 7% decline in extended trading.
Bumble faces competition from a much larger rival, the Match Group, which is intensifying its marketing efforts to target younger users amid challenges such as inflation and high borrowing costs, which have affected non-essential spending.
Match Group recently forecast that their current-quarter revenue would be below expectations.
In 2022, an average of 40 million people used Bumble, Badoo, or Fruitz monthly, according to a filing with the US Securities and Exchange Commission. Bumble employed over 950 full-time staff by the end of 2022, with around 770 employees outside the United States.
During a post-earnings call, Bumble’s CEO, Lidiane Jones, announced plans to relaunch the company’s namesake app and enhance its premium Plus offering. Analysts anticipate Bumble will focus on reigniting average revenue per user (ARPU) growth and expanding its market globally.
For the current quarter, Bumble expects revenue between $262 million and $268 million, compared with analysts’ average estimate of $277.9 million. The company also saw an increase in total paying users across its apps to 4 million in the fourth quarter, up from 3.4 million a year earlier.
However, fourth-quarter revenue of $273.6 million fell short of analysts’ estimates of $275.3 million, and the company posted a surprise loss per share of 19 cents, contrary to analysts’ expectations of a profit of 12 cents per share.
