- Match Group will cut 6% of its staff and end live-streaming services as part of a strategy to address pressure from activist investors.
- The company is also experiencing a decline in paying users for its Tinder app, prompting concerns about its long-term growth.
OUR TAKE
Match Group plans to lay off 6% of its workforce and discontinue live-streaming services as it faces pressure from investors and a decline in paying Tinder users, which reflects the urgent need to adapt to declining user engagement and increasing investor demands in a competitive market.
-Lilith Chen, BTW reporter
What happened
Match Group, the parent company of Tinder, plans to lay off about 6% of its workforce and discontinue live-streaming services due to pressure from activist investors and a decline in paying users.
The layoffs are part of a broader strategy to address the challenges Match Group is experiencing, particularly a slowdown in growth following the pandemic. Many dating app operators, including Match Group and its smaller rival Bumble, have been grappling with this post-pandemic growth slowdown. Match Group is also facing delays in launching new features for its key apps, including Tinder.
In its second-quarter earnings report, Match Group reported a revenue increase of 4% to $864M, surpassing analysts’ estimates. However, the number of paying Tinder users declined by 8%, totaling 9.6M, which is an improvement from the previous quarter’s 9% decline. This marks the seventh consecutive quarter of decline in total paying users across Match Group’s platforms, which fell 5% to 14.8M.
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Why it’s important
The announcement of layoffs at Match Group comes shortly after activist investor Starboard Value acquired a 6.6% stake in the company, urging management to consider a sale if it cannot revitalise its business. Other activist investors, including Elliott Investment Management and Anson Funds Management, are also advocating for changes, reflecting growing dissatisfaction with the company’s performance.
In its latest forecast, Match Group projects third-quarter revenue between $895M and $905M, falling short of the expected $915.4M. This underperformance highlights the challenges the company faces in a competitive landscape.
“Despite some encouraging signs, there is still a lot of work to do to keep the business on track,” Third Bridge analyst Jamie Lumley said.
Analysts emphasise that significant work is needed to stabilise the business and enhance user engagement. Notably, Tinder’s global downloads have declined by 12% for four consecutive quarters, underscoring the difficulties Match Group encounters in retaining and attracting users in the crowded dating app market.
