Bumble said on Tuesday (Feb 27) it would cut about 350 roles, marking new CEO Lidiane Jones' first big move, 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, which offers dating apps such as Bumble, Badoo, and Fruitz, fell more than seven per cent in extended trading.
Bumble expects to incur about US$20 million (S$26.9 million) to US$25 million in one-time charges related to the job cuts, the majority of which will be recognised in the first two quarters of 2024.
The company competes with larger rival Match Group which is looking to target younger users with intense marketing initiatives, as sticky inflation and high borrowing costs affect non-essential purchases. Last month, Match forecast current-quarter revenue below estimates.
Bumble would relaunch its eponymous app and revamp its premium plus offering, CEO Jones said on a post-earnings call.
"As core markets like the US mature, the focus at Bumble will be on reigniting ARPU growth and driving further market expansion at a global level," Third Bridge analyst Jamie Lumley said.
Bumble expects annual revenue growth between eight per cent to 11 per cent, compared with estimate of 13.3 per cent growth, according to LSEG data.
Citi analysts said in a note on Tuesday that they are not surprised to see slowing growth at Bumble and its fiscal 2024 outlook is a "notable step down in growth."
Bumble expects current-quarter revenue between US$262 million and US$268 million, compared with analysts' average estimate of US$277.9 million.
Total paying users across Bumble's apps increased to four million in the fourth quarter ended Dec 31, from 3.4 million a year earlier.
In the fourth-quarter revenue came in at US$273.6 million, falling short of analysts' estimates of US$275.3 million. It also posted a surprise loss per share of 19 cents. Analysts on average were expecting a profit of 12 cents per share.
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