Bumble, the app that empowered women to make the first move, just announced that it would lay off close to a third of its staff—about 240 jobs. The company is having a hard time justifying the necessary growth to get there. Investors are growing more and more doubtful of its long-term outlook. The decision is another example of a larger pattern taking place in the tech realm, with companies just like Lyft continuing to adapt to an evolving marketplace.
After such a tumultuous year, Bumble has a lot riding on its IPO. Whitney Wolfe Herd, who stepped down as CEO last year, returned to her position in March. Bumble first joined the stock market in 2021, at a valuation of more than $13 billion. Since then, that company’s stock has plummeted 95 percent. Today, the shares trade at under $7/share, representing a loss of almost all their post IPO value.
Bumble’s layoffs, which were announced this week, are expected to save the company $40 million per year. The savings will be reinvested into the development of the company’s technology and other growth efforts, according to the company. Wolfe Herd emphasized the need for restructuring, stating, “We need to take decisive action to restructure to build a company that’s resilient, intentional, and ready for the next decade.”
Despite these efforts, Bumble’s growth has stagnated. At the end of last year, the startup boasted a mere 4.1 million paying users across all its apps. Over the same time, their revenues increased by under 2%. Investors have worried that Bumble would struggle to regain that momentum and do so in a crowded market.
Bumble’s shares are up by 20% since the layoff announcement was made, signifying a temporary move in the right direction for Bumble. Analysts are still pessimistic on the company’s long-term recovery and growth path. The dating app landscape is extremely competitive, and Bumble will need to execute against these challenges in order to win back investor confidence.