Bumble Inc. experienced an explosive surge in its stock value on Wednesday, as shares of the online dating app rallied at least 15%. This latest jump comes after the company made the unexpected pronouncement that it plans to cut its staff by a third, affecting about 240 jobs. In an unexpected decision, Bumble is laying off nearly 25 percent of its workers. This shift is explicitly intended as a step in TSU’s larger strategy to radically reshape its operating structure and better align with its priorities of priority.
In a separate securities filing last week, Bumble announced it would take between $13 million and $18 million in charges related to the layoffs. The company expects the bulk of these costs to take effect in the third and fourth quarters of this fiscal year. These latest cuts arrive at a time when Bumble is under pressure for its poor performance since its 2021 initial public offering. As a result, the company’s market valuation has crashed from $7.7 billion to just under $538 million. In turn, management is moving quickly and aggressively to reverse these trends.
Bumble’s leadership expects the layoffs to result in annualized savings of about $40 million. This decision is a further sign of the eco-minded company’s focus on improving its operations and adapting under a tough economic climate. Along with the layoffs, Bumble revised its projections for revenue downward for the upcoming quarter. The new expectations have soared up to $244 million – $249 million. That’s a big jump from previous forecasts of $235 million to $243 million.
It did make a thrilling adjustment to the positive of its adjusted EBITDA outlook. The company’s current expectations are for $88 million to $93 million, increased from a prior range of $79 million to $84 million after reporting first-quarter results four weeks ago. With each of those financial forecasts, the company has paired the announcement with layoffs. This indicates a significant strategic shift in that it’s meant to better position the company to move through increasingly difficult market headwinds.