Bumble Inc. is undergoing a significant workforce reduction, slashing approximately one-third of its employees following recent leadership changes as it strives to revamp its online dating app and reignite user growth.
In a statement released alongside its quarterly results on Tuesday, the Austin-based company announced plans to cut around 350 positions globally. CEO Lidiane Jones outlined the rationale behind the layoffs, emphasizing the consolidation of engineering and product teams into fewer locations to streamline decision-making processes. The restructuring aims to prioritize the integration of artificial intelligence and safety features into the app.
As of the end of 2022, Bumble boasted over 950 full-time employees, with approximately 770 based outside of the US, according to regulatory filings. The company anticipates incurring non-recurring charges of $20 million to $25 million due to the layoffs but expects to save about $55 million annually. A portion of the savings, around $15 million, will be reinvested in product development, engineering, safety enhancements, and brand initiatives to drive long-term growth, explained CFO Anuradha Subramanian.
However, Bumble’s revenue forecast for the current quarter fell short of analyst expectations, with projected earnings between $262 million and $268 million. This disappointing outlook, coupled with fourth-quarter revenue of $273.6 million missing estimates, led to a 6.8% drop in share value during extended trading.
The organizational restructuring follows the announcement in November that founder Whitney Wolfe Herd would step down as CEO and transition to the role of executive chair. Jones, who assumed the CEO position in January, recently appointed four new C-suite executives, including two from her previous employer, Salesforce Inc.’s Slack Technologies.
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The revamped leadership team will spearhead a major overhaul of the dating app in the second quarter, the first significant update in two years, aimed at enhancing its appeal to younger users. Jones acknowledged the challenge of revitalizing user growth, which has slowed since late 2021 due to an influx of product features that have impacted app performance and user experience.
Jones emphasized the need to cater to evolving user preferences, noting a shift towards more organic and natural dating experiences among active users. The company aims to strike a balance between traditional swiping-based discovery and a more flexible approach to user interaction.
Bumble’s strategic realignment underscores its commitment to meeting the evolving expectations of its user base while navigating a dynamic and competitive online dating landscape.
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