Online-dating company Bumble Inc. is set to lay off roughly 350 workers, which constitutes about 37% of its workforce, as part of a strategic restructuring plan. This decision has caused Bumble shares (BMBL, +3.62%) to fall by approximately 8% in after-hours trading.
Moving Toward Future Strategic Goals
The company stated that this move is aimed at “better aligning” its operating model with future strategic priorities to drive stronger operating leverage. As a result of these layoffs, Bumble anticipates incurring $20 million to $25 million in non-recurring charges from severance, benefits, and related costs, with most of these charges expected to be recognized in the first half of this year.
Focus on Future Growth
Bumble CFO Anu Subramanian highlighted the company’s focus on execution and setting the stage for future growth. The clear plan in place is intended to drive product velocity, reduce operational friction, and strengthen the company’s margin profile and cash-flow potential for the years ahead.
Transition in Leadership
Following a recent change in leadership, founder Whitney Wolfe Herd has stepped aside, and former Slack CEO Lidiane Jones has taken over the helm in January. Jones emphasized the significance of the decisive actions being taken to transform Bumble and relaunch the dating app.
Industry Trends
These layoffs at Bumble are part of a broader trend of job cuts within the tech industry. Recent examples include Sony Group Corp. cutting 900 jobs in its PlayStation unit and Expedia Group Inc. laying off about 1,500 employees as they continue to “recalibrate resources.”
Financial Performance
On the financial front, Bumble reported fourth-quarter revenue that missed analysts’ estimates, along with a current-quarter revenue forecast also falling short of expectations. Over the past 12 months, Bumble shares have seen a decline of about 45%.
Overall, these strategic changes underscore Bumble’s commitment to adapting to evolving market conditions and positioning itself for sustainable growth in the future.