Zoosk Breaks Up With 1/3 Of Staff In Tough Times

A year after laying off 15% of its staff, Zoosk is ending things with another 40 employees. The break up will see the San Francisco-based dating platform part ways with 1/3 of the company.

Despite $61 million in funding, Zoosk has hit hard times. The old-school web dating app first hit it big building extensions for MySpace, Facebook, Hi5, and Bebo. Two years after launch, it reached 40 million registered users and 12 million active users. Bessemer Venture Partners, ATA, Crosslink, and more offered millions in funding. Other money came from selling subscriptions for premium features, like additional ways to contact dates.

Despite its early success, Zoosk has struggled in recent years. The company has found it difficult to adapt to the changing, increasingly mobile-focused times. Apps like Tinder, Hinge and Coffee Meets Bagel now dominate the market, edging out older dating services that haven't evolved to incorporate modern technology.

Zoosk has felt the sting severely. The company was forced to abandon its plans for an initial public offering in 2014, after filing for a $100 million IPO. At the same time, its founders stepped down and former CFO Kelly Steckelberg became CEO. The management shuffle was followed by a layoff of 15% of the company in January 2015.

Circumstances have failed to improve, leading Zoosk to its latest decision to let go another 40 team members. Steckelberg gave TechCrunch this statement:

“This reduction will increase operating efficiencies and streamline responsibilities as we prepare to bring several innovative product announcements to market in 2016. Our optimism for these developments that we expect to positively impact our growth does not diminish the reality of today’s news felt by our staff. We are committed to treating the impacted colleagues with respect and support during this transition.”

Zoosk is not the only one suffering in the current climate. As funding becomes harder to find, a number of startups are having to part ways with staff to stay in business. The online dating market is particularly difficult to compete in, as there are so many options for consumers.

Britanny Carter, an analyst for the research firm IBISWorld, spoke to the Wall Street Journal about the issue. “In terms of revenue, the online-dating industry has matured," she said, "but there are too many players and not a lot are generating sufficient revenue for these sites.”

Unless Zoosk has a major overhaul in store – something that can drag the dated service back into relevance – it may be doomed. It's best hope now could be a buyout from a bigger dating company. For more about this service you can read our review of Zoosk.