Match Group Inc., which on Wednesday announced plans to lay off about 8% of its workforce, or about 200 workers, as spending on their dating apps declines, joined a growing list of US companies reducing employment to contain costs.
A day earlier, the company provided a disappointing quarterly revenue forecast, which it attributed to the struggling economy, a strong dollar, and “significant” subpar Tinder product execution. Product delays have also had an impact on its Hinge app at a time when rival Bumble Inc. competition is growing.
The company stated in an email that the job cuts mostly affected areas like recruiting. The cuts are currently being implemented in other nations in addition to the United States.
Severance payments and related expenses totaled about $3 million for Match in the fourth quarter, and the company predicted additional expenses of about $6 million in 2023. It claimed that by making the changes, margins would improve in the second half of the year.
Match Inc. stock fell 7.7%. Match is based in Texas.
In order to get ready for a potential recession, other tech companies, including Microsoft Corp. and Amazon.com Inc., have been cutting tens of thousands of jobs.
In addition to the cuts, CFRA Research analyst Angelo Zino predicted that Match would focus more on marketing its Tinder and Hinge brands, which are key areas of growth for 2023.
Match, which has primarily relied on word-of-mouth promotion, announced that Tinder will begin its first global marketing campaign this quarter in an effort to enhance brand recognition.
According to Refinitiv data, it predicted first-quarter revenue between $790 million and $800 million, below analyst estimates of $817.3 million. Additionally, the business disclosed its first quarterly revenue decline.