Match Group Inc., the parent company of Tinder, has announced plans to cut 6% of its global workforce. This decision comes amid a continued slump in the number of users paying for Tinder, its most popular dating app. The company also owns Hinge, Plenty of Fish, and OKCupid. The announcement follows an 8% decline in the number of paying Tinder users.
The job cuts will primarily result from shutting down its live-streaming app Hakuna and removing live-streaming features in some dating apps. Match Group has reported declines in Tinder subscriber numbers for several consecutive quarters. Despite this, Tinder remains the world’s most popular dating app. The latest dip in paying users was less severe than some investors had anticipated.
In a letter to shareholders on Tuesday, Match Group referred to the latest subscriber fall as an “improvement” compared to a 9% dip in the previous quarter. However, Tinder faces growing competition from rival dating apps like Bumble, which recently reported an increase in paying users.
“Despite owning some of the best-known brands in the dating market, Match Group has been struggling with intense competition,” said Russ Mould, investment director at AJ Bell. “A lack of innovation seems to be a key issue, and activists are putting pressure on the company to come up with new ideas to drive up user numbers.”
Some investors have urged Match Group to improve its performance and deliver more value for shareholders. The company’s stock price has declined by more than 60% from its peak in 2021. Match Group told shareholders that Tinder’s growth was previously driven by its “engaging and fun user experience,” particularly the convenience of swiping left or right on potential matches. However, the company acknowledged that user preferences have evolved.
“Sentiment has shifted as users seek a lower-pressure experience with greater authenticity that more easily delivers desired connections,” Match Group said. The company plans to test new lower-pressure forms of discovery on Tinder, including more ways for users to interact with friends.
Tinder has recently introduced new features, such as allowing friends and family members to play matchmaker and using artificial intelligence (AI) to help users select the best profile images. Despite the challenges, Russ Mould noted that Tinder’s slowed decline in paying users and the growth of Hinge offer a “glimmer of hope” for Match Group.
Hinge has seen a sharp increase in paying users, with revenues rising by 48% compared to the same period in 2023. In contrast, Tinder’s direct revenue grew by just 1% during the same period. Following the announcement of its results, Match Group’s share price rose by nearly 10% in after-hours trading on Tuesday.
