Bumble to Lay Off 350 Employees in 2024 Due to Decrease in User Spending

Bumble said Tuesday it would cut about 350 roles, marking the first major move by new CEO Lidiane Jones after the online dating company forecast disappointing first-quarter revenue as it grapples with a slowdown in user spending.

Shares of the Austin, Texas-based company that offers dating apps such as Bumble, Badoo and Fruitz fell more than 7% in extended trading.

Bumble expects to incur approximately $20 million to $25 million in one-time costs related to the job cuts, most of which will be recorded in the first two quarters of 2024.

The company competes with larger rival Match Group, which wants to target younger users with intensive marketing initiatives as sticky inflation and high borrowing costs affect non-essential purchases. Last month, Match predicted the turnover for the current quarter to be lower than estimates.

Bumble is relaunching its app of the same name and revamping its premium plus offering, CEO Jones said on the earnings call.

“As core markets such as the US mature, Bumble is focused on re-igniting ARPU growth and continuing to grow the market globally,” Third Bridge analyst Jamie Lumley said.

Bumble expects annual revenue to grow by 8-11 percent, compared to 13.3 percent growth according to LSEG data.

Analysts at Citi said in a note on Tuesday that they are not surprised to see Bumble’s growth slowing and that its 2024 financial outlook is a “significant step down.”

Bumble expects revenue for the current quarter in the range of $262 million to $268 million, compared to the average analyst estimate of $277.9 million.

Total paying users of Bumble’s apps grew to 4 million in the fourth quarter ended Dec. 31, up from 3.4 million a year earlier.

Fourth-quarter revenue was $273.6 million, which fell short of analysts’ estimates of $275.3 million. It also made a surprising loss of 19 cents per share. Analysts on average expected a profit of 12 cents per share.