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Dating app Bumble will lay off approximately 30 percent of its workforce — some 240 employees — according to a regulatory filing made with the Securities and Exchange Commission by the company on Wednesday.
The layoffs come as the company aims to cut costs and refocus on expanding its customer base. Staff impacted by this change will be leaving in the second half of the year.
Bumble estimates it will save $40 million, which the Austin, Texas-based company intends to reinvest mostly in “product and technology development” — the company is known to be exploring how artificial intelligence can be deployed.
CEO Whitney Wolfe Herd, who also co-founded the dating app Tinder, made the announcement to staff on Wednesday, saying that the online dating business is at an “inflection point.”
In an email to Bumble employees, she said: “The reality is, we need to take decisive action to restructure to build a company that's resilient, intentional, and ready for the next decade.”
Herd stepped down as CEO at the start of 2023 but returned to the role earlier this year.
A Bumble spokesperson told CNBC that the decision to reduce the company's workforce is in line with its strategic goals and was “not made lightly.”
“Our focus now is on moving forward in a way that strengthens our core business, continues to serve our members effectively and positions us for future growth,” they wrote.
The securities filing states that Bumble will incur non-recurring charges of between $13 million and $18 million for severance and other benefits paid to those employees being made redundant.
Shares in Bumble have plunged since the company’s initial public offering in 2021. Its market value has plummeted from $7.7 billion to about $538 million as of Tuesday’s close.
The online dating company’s share price jumped 26 percent in lunchtime trading after the announcement.
Just last month, during a company earnings call, Herd acknowledged that Bumble had lost traction with customers and would focus on providing users with better matches.
“We are accelerating our efforts to improve our member base and show members a more thoughtful selection of high-quality, relevant profiles,” she said in May.
“As we execute on our plans, we are very focused on building a sustainable revenue model with a healthy paying member base,” she added.
In May 2024, Herd spoke extensively about how AI could be applied to dating apps to better match people with potential partners.
She explained Bumble would be using AI to stay close to its main goal: “A safer, kinder digital platform, for more healthy and more equitable relationships.”
