More Trouble For Zoosk? 15% Of Staff Laid Off

Zoosk may be a leading online dating company, but recent times have proved it isn't smooth sailing even if you're a hit.

Sources told TechCrunch Zoosk laid off 15% of its employees in January 2015, a figure the company has since confirmed. The change was made as part of a larger effort to cut costs in many areas.

This latest news comes after a string of ill omens for Zoosk. The company's founders left their leadership positions at the end of 2014, hinting at trouble that may be happening behind the scenes. Shayan Zadeh and Alex Mehr pulled back from their daily involvement with the company, choosing to become members of the board instead. CFO Kelly Steckelberg stepped up as CEO in the wake of their departures.

Zoosk was also forced to reassess its IPO plans. The initial plans were filed with the SEC in April 2014 for a $100 million initial public offering. The filing revealed that Zoosk was seeing a net loss of $2.6 million in 2013, was funneling a significant amount of money into marketing efforts, and saw Tinder as a strong threat.

Its fears, as TechCrunch and 7Park note, are not entirely unfounded. Though Zoosk's member count is high (29 million) and it's a competitor for major sites like eHarmony and Match, its successful presence is largely online. When it comes to mobile, Tinder is running away with the market and leaving everyone else in the dust.

That could possibly be a reason Zoosk decided to hold back on its IPO plans. Steckelberg confirmed to TechCrunch that conditions were not favorable enough for Zoosk to proceed with the offering.

“Since the time we filed, the market condition around comparables that would be used to help value our company, like Angie’s List and Care.com, have not performed well,” she said. “While the overall market might seem receptive to a public offering, subscription businesses have suffered.” For now, Zoosk plans to sit back, keep a careful eye on the market, and delay its IPO until later this year.

Regarding the layoffs, Zoosk left this statement with TechCrunch:

In an effort to speed Zoosk’s path to becoming a self-sustaining, profitable company, we’ve lowered our expenses in many areas. We also had to make the difficult decision to reduce our headcount by 15%. We respect and support our Zoosk colleagues who were affected by this reduction.