Match Group Inc. will reduce its global workforce 8% after the dating-app company provided first-quarter revenue guidance that fell short of analysts’ estimates and looks to cut costs.
(Bloomberg) — Match Group Inc. will reduce its global workforce 8% after the dating-app company provided first-quarter revenue guidance that fell short of analysts’ estimates and looks to cut costs.
The job cuts have already been made in the US, and are ongoing in other countries, Chief Financial Officer Gary Swidler said on a call Wednesday. Shares of Match declined 5.1% as of 10:20 a.m. in New York.
The Dallas-based company said Tuesday it expects total revenue of $790 million to $800 million in the first three months of 2023, missing analyst estimates for $816 million. About 200 people globally will be affected by the headcount reduction, many in roles such as recruiting, according to the company. Hiring will still continue at Hinge and other “key investment areas.”
The company is reviewing how to pare spending on areas like jobs, marketing and office space, and expects to incur about $6 million of severance and similar expenses, it said in a statement Tuesday. It’s also preparing to shift savings from lower-growth brands into higher-growth businesses. Match says the move will produce an improvement in margins in the second half of the year as revenue growth accelerates.
“We expect it to take a little time in the first half of 2023 to build momentum, but are confident that improved product momentum and and our financial discipline position us for much stronger growth and profitability in the back half of the year as well as longer term,” Swidler said on the call.
The disappointing outlook caps a difficult year for the owner of dating apps like Tinder, Hinge and OkCupid. In 2022 the company changed chief executive officers, was hampered by a strong dollar weighing on overseas sales and dealt with a hangover from Covid-19 restrictions. Those factors sent its shares plummeting almost 70% last year, making it the second-worst performer in the S&P 500.
The final three months of the year were tough. Fourth-quarter sales fell 2.5% to $786 million while the number of paying customers dropped 1% to 16.1 million in the period.
Former CEO Shar Dubey stepped down from her role last May and former Zynga Inc. president Bernard Kim became her successor. In the months since Kim took on the new role, Match has started experimenting with new forms of monetization including a more expensive version of Hinge and its flagship product Tinder.
Hinge has been one of the bright points for the company and has seen success in markets such as Germany and Sweden. The company said previously it expects the international expansion and new paid tier to bring in at least $100 million of direct revenue for Hinge in 2023.
(Includes details on layoffs in the third paragraph, updates shares)
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