Bumble, once a powerful force in online dating, is facing a reckoning.
The company today released weak fourth-quarter 2023 results, showing a net loss of $32 million and $273.6 million in revenue. While up from the same period a year earlier, the earnings were below Wall Street expectations and combined with a disappointing forecast for the first quarter of 2024, sending Bumble shares down about 10%. % in out-of-hours operations.
Bumble is taking drastic measures to stop the bleeding.
CEO Lidiane Jones announced that 37% of Bumble's workforce, or around 350 employees, would be laid off and that Bumble would embark on an overhaul of the app aimed at reigniting growth. The near-term product roadmap will focus on artificial intelligence and enhanced security measures, Jones said, as well as features designed to appeal to younger audiences.
“We believe these actions will strengthen our core capabilities and allow us to continue to deliver new and engaging user experiences that create healthy and equitable relationships,” Jones said during an earnings conference call today. “Today we have many users who love the online dating paradigm (swipe, discover and search), but there is also a set of users who want more flexibility to be able to experiment and discover people in a more organic and natural. “
Bumble faces challenges on multiple fronts as its main rival, Match Group, which owns Tinder, Hinge and Match, among other dating apps, goes after Gen Z users with increasingly aggressive marketing tactics.
Bumble's payer growth has slowed since late 2021. And many of the capabilities introduced to Bumble's apps over the past 18 months have not resonated with the user base, Jones said during the call.
Bumble has also had to contend with internal organizational changes following founder Whitney Wolfe Herd resigning as CEO last November and moving to the role of CEO. Jones, who joined from Slack in January, named four new senior executives at Bumble in the last week alone.
Slower growth isn't unique to Bumble. Dating apps in general, including those from Match Group, have seen a decline in revenue from users reluctant to shell out cash for premium add-ons. According to 2023 Pew research studyWhile 41% of users age 30 and older have paid for dating apps, only 22% of users under 30 (the demographic considered most desirable) have done the same.
Platforms have attempted to combat the decline in several ways. Tinder is pivoting focusing on long-term relationships, a top priority for Generation Z, which surveys show is less interested in casual relationships and sexual encounters. Meanwhile, Hinge, among others, is embracing the move to IRL meetings, launching a background and promotions to sponsor singles events.