Dating app Bumble is downsizing its staff by nearly 33%, citing challenges in growth and a decline in investor confidence.
In a message to employees, CEO Whitney Wolfe Herd acknowledged the difficult circumstances facing the company as the dating industry reaches a turning point.
She stated, “We must take decisive action to restructure and build a resilient, purposeful company for the next decade.”
Ms. Wolfe Herd, who stepped down as CEO last year but returned in March to revive the company’s prospects, founded Bumble, which also owns Badoo.
The app gained popularity for its unique approach of allowing women to initiate contact with matched male users, while same-sex matches had equal opportunity to send the first message. However, in an effort to drive growth, the company changed this rule last year.
In 2021, Bumble debuted on the stock market with a valuation of over $13 billion, making Ms. Wolfe Herd the youngest self-made female billionaire at the age of 35.
However, the company’s stock has significantly decreased in value since then, now trading at less than $7 per share. This decline reflects the overall trend in the dating sector, as companies struggle to convince users to pay for their services.
Despite reporting a 11% increase in paying users, Bumble’s revenue only grew by 2% last year, resulting in financial losses. The company plans to cut 240 jobs, reducing expenses by $40 million annually, which will be redirected towards technology development.
Other companies in the industry, such as Match and Tinder, have also faced similar challenges. Last month, Match announced a 13% reduction in its workforce.
Following the announcement of job cuts, Bumble’s stock rose by 20%.