Bumble Announces Job Cuts Amidst Forecasted Revenue Slump

Bumble Inc., the company behind popular dating apps like Bumble, Badoo, and Fruitz, has declared a significant reduction of approximately 350 positions. This decision marks a pivotal move by the newly appointed CEO, Lidiane Jones, in response to anticipated weaker revenue in the first quarter. The announcement came amid concerns over reduced consumer spending, prompting a more than 7% drop in the company’s shares during extended trading.

The Austin, Texas-based firm anticipates incurring one-time charges ranging from $20 million to $25 million due to these layoffs, with expectations to recognize the majority of these costs within the first half of 2024. This restructuring comes at a time when Bumble faces stiff competition from its larger rival, Match Group, which has been aggressively marketing to captivate younger demographics. The economic pressures of inflation and high borrowing rates have led to a cautious approach toward non-essential expenses, affecting the online dating sector at large.

Throughout 2023, dating app companies, including Bumble and Match Group, witnessed a downturn in their stock performance, fueling worries over growth prospects. Bumble’s stock experienced a near 30% decline, underlining the challenges within the online dating industry.

For the upcoming year, Bumble has set its revenue growth expectations between 8% to 11%, a projection that falls short of the anticipated 13.3%. The company’s forecast for first-quarter revenue stands between $262 million and $268 million, which does not meet the analysts’ average projection of $277.9 million.

Despite the downturn, Bumble reported an increase in total paying users to 4 million in the fourth quarter from 3.4 million the previous year. However, the fourth-quarter revenue of $273.6 million missed the forecasted $275.3 million, alongside an unexpected loss of 19 cents per share against the predicted profit of 12 cents per share.

This strategic move by Bumble highlights the ongoing adjustments within the online dating industry as it navigates through economic uncertainties and changing consumer behaviors.