Tinder’s parent company Match Group is set to terminate 6% of its workforce as part of its efforts to eliminate live-streaming services from its dating platforms. Although Tinder’s revenue report for Q2 2024 revealed that the dating app had seen 4% growth through the quarter and earned around $864 million in revenue, its parent company has decided to eliminate a sizeable portion of its workforce.
The decision comes amid an industry-wide slump characterized by slow user growth that began during the coronavirus pandemic and has affected major players such as Bumble and Match Group. As the pandemic significantly limited in-person meetups for several months and had societal effects that are still felt to this day, the online dating industry is still struggling to reach prepandemic levels.
However, the move to phase out live-streaming services, rather than the drop in user growth, was behind Match Group’s decision to reduce its workforce. Match Group also made the move in response to activist investors who have been pressuring the company to institute changes, Reuters reports. Even so, the decision will be a hard pill for the axed employees to swallow.
Although Tinder generated more than $800 million in the second quarter of 2024 and registered 4% growth, the number of paying Tinder users has continued to decline in recent months. This decline coupled with the pandemic-related slowdowns most likely contributed to Tinder’s decision to slash its labor force.
Aside from these two factors, Tinder has also been pressured by delays in debuting new features and improving user experience that have hindered effective service delivery. According to M Science research analyst Chandler Willison, Tinder’s year-over-year growth is still challenged, but the improved trends M Science observed in its data analysis and reported by Tinder management suggest that the company has experienced some improvement in its brand perception and user experience, which has had a positive effect on sequential payer growth.
News of Tinder’s impending workforce purge comes soon after activist investor Starboard Value purchased a 6.6% stake in Match Group and urged Tinder to sell if it can’t breathe life into its operations. Match Group has also received pressure throughout 2024 from Anson Funds Management and Elliot Investment Management to make changes.
Global Tinder downloads reduced by 13% in Q2 2024, making it the fourth consecutive quarter the dating application was plagued with declining downloads. Furthermore, Tinder’s total paying users dropped by 5% to 14.8 million users, marking the seventh consecutive quarter of declining users.
There are several industry-wide challenges that players in the online dating industry are facing, and it is up to the different entities such as Momo Inc. (NASDAQ: MOMO) to find workarounds to those issues so that they don’t put brakes on the growth trajectory of the industry.
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