Match Group to Lay Off 8 Percent of Its Employees

Match Group is expected to lay off up to 200 employees, or about 8 percent of its workforce (currently around 2400 employees before the cut) after sharing a disappointing outlook for the first half of 2023 in its latest earnings call.

According to Reuters, the company blamed “significant” poor product execution at Tinder, in addition to dealing with a tough economy and a strong dollar. CEO Bernard Kim brought in a new management team and is in the process of rebranding Match Group’s star app.

The layoffs were primarily in recruiting, with CFO Gary Swidler noting that the company is restricting its hiring to Hinge and other growth businesses, with notable cuts to Tinder staff.

“Our cost savings initiatives are focused on rightsizing headcount and reducing overhead costs, including office expenses and professional fees,” Swindler said on the call according to the transcript published in The Motley Fool. “We expect to reduce our global workforce by approximately 8% in aggregate. We've already reduced roles in the U.S.”

This move will cost Match Group about $3 million in severance costs for its fourth quarter of 2022 and the company is expecting additional costs from the layoffs of about $6 million in the first half of 2023, according to MarketWatch. Match Group expects that despite the initial costs the layoffs would improve margins for the second half of the year.

The market did not respond well to the news. Match Group stock fell 8 percent by mid-day after the move was announced, according to MarketWatch.

Still, CEO Bernard Kim remained optimistic on the call, saying that changes were underway at Tinder, including more focus on Gen Z and “initiatives around authentic content and self-expression” according to Motley Fool. He also pointed to developing AI to enhance recommendations for matches, and that the company would be working on this in 2023. Notably, Match Group had already mentioned testing a new high-end Tinder service that would cost $500 per month.

According to Reuters, CFRA Research analyst Angelo Zino said: "In addition to the cuts, we expect Match to place greater emphasis on marketing its Tinder and Hinge brands, core areas of growth for 2023.”

Match Group seems to be leaning that way. Tinder will be launching its first global marketing campaign in the first quarter to improve its brand perception, and the company has noted that while Hinge is behind on new feature rollouts, they are still in the works. The app recently launched a premium $60 per month service for Hinge users.