Tinder parent Match cuts 13% of workforce, forecasts revenue above estimates
FILE PHOTO: The dating app Tinder is shown on a mobile phone in this picture illustration taken September 1, 2020. REUTERS/Akhtar Soomro/Illustration/File Photo
(Reuters) - Match Group on Thursday forecast second-quarter revenue above Wall Street estimates and said it would reduce 13% of its workforce to cut costs, as the Tinder parent plows ahead with its business revamp plan.
The layoffs are the first major structural change at Match since new CEO Spencer Rascoff took the helm in February and was tasked with tackling a slowdown in user engagement.
The online dating industry has hit a rough patch as persistent inflation and a lack of innovative features prompted consumers to move away from dating apps such as Tinder and Bumble.
In response, Match and Bumble have been refining their applications and introducing artificial intelligence features such as AI-enabled discovery to make it easier for users to improve their dating outcomes.
Match, which also owns dating apps Hinge and OkCupid, has introduced features such as "double date" and Game Game, which was a voice-based experience that allowed users to practice flirting with an AI date, to better cater to Gen-Z audiences.
The double-date feature, which allows users to team up with a friend and match with other pairs, is resonating with its younger audience, with 90% double-date profiles from users under 29, CEO Rascoff said.
Its revenue per paid user increased to $19.07 from $18.87 a year ago.
For the second quarter, the company forecast revenue between $850 and $860 million, above analysts' average estimates of $846.7 million, according to data compiled by LSEG.
Match is also testing new features to boost its security and verification programs and has seen a more than 15% reduction in bad actor reports.
For the quarter ended March 31, the company's revenue declined by 3% to $831 million, beating estimates of $827.5 million.
Rival Bumble on Wednesday reported a more than 7% fall in first-quarter revenue, but met market estimates.
(Reporting by Kritika Lamba in Bengaluru; Editing by Devika Syamnath)
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