When dating app Bumble entered India, it had the backing of actor Priyanka Chopra. An ad featuring her, and promising a “not loose” networking space, caught on fast. Bumble marketed itself as a safe space for women, disrupting a market dominated by a fast-paced “swiping” culture.

“Early in my career, I was the target of online abuse and harassment…the internet felt like the Wild West, dangerous and toxic. I knew there had to be a better way: A kinder, more respectful internet,” Whitney Wolfe Herd, founder and former CEO of Bumble, wrote in Forbes India last year. Herd said she started Bumble with that principle in 2014 after her departure from Tinder, a rival dating app she co-founded.

Cut to 2024. Bumble, the women-centered dating app, seems to be facing serious challenges across geographies. A slowdown in user spending, a recent leadership shake-up and financial troubles have pushed it to cut a significant 30% of its workforce. This will affect about 350 workers, Reuters reported. Bumble had over 950 full-time employees at the end of 2022, with about 770 outside of the US.

So how did Bumble get here? The answer lies in its financial performance and the state of the overall dating industry, which seems to be undergoing a major shift.

Bumble tumbles: Bumble’s revenue forecast for the January-March quarter was disappointing. Its performance in the fourth quarter of 2023 was also lacklustre as users tightened their purse strings. For the quarter ended December 2023, Bumble saw a net loss of $32 million and revenue of $273.6 million. While its performance improved from the year-ago period, it fell short of Wall Street’s projections. Bumble expects March quarter revenue to come in at $262-268 million—lower than analysts’ estimate of $277.9 million. The announcement also pushed Bumble’s stock down nearly 10% in after-hours trading.

Announcing the layoffs, CEO Lidiane Jones said Bumble would undergo an app overhaul to boost user growth. The near-term product roadmap would prioritize artificial intelligence, strengthening safety measures and features that resonate with younger demographics, according to Jones. She added that the job cuts would help consolidate the engineering and product teams into fewer locations and speed up decision-making.

As a result of the layoffs, the company expects a one-time charge of $20-25 million and projects annual savings of $55 million. A portion of these savings (around $15 million) will be reinvested in key areas such as “product, engineering, safety and brand that will help drive long-term growth,” chief financial officer Anuradha Subramanian said.

“We believe these actions will strengthen our foundational capabilities and enable us to continue delivering new and engaging user experiences that create healthy and equitable relationships,” Jones said.

Even as Bumble struggles to drive up its numbers, the app is facing tough competition, particularly from rival Match Group—which owns Tinder, Hinge and Match. Bumble seems to have been hurt by Match Group’s aggressive marketing tactics targeting Gen Z users. Adding to its woes are economic factors such as inflation and high borrowing costs leading to reduced non-essential spending. Even Jones acknowledged during the earnings call that Bumble’s growth in paying users has been decelerating since late 2021.

Worse, several features introduced by Bumble over the past 18 months have failed to resonate with the user base. Simply put, Bumble needs to find newer ways to engage with people and get them to pay for its services, even if that means pushing for more dating apps that appeal to users. This was echoed by Third Bridge analyst Jamie Lumley. “As core markets like the US mature, the focus at Bumble will be on reigniting ARPU growth and driving further market expansion at a global level,” Lumley told Reuters. (ARPU is short for average revenue per user.) He added that to maintain revenue growth, Bumble may try to mirror Match’s multi-app strategy.

Interestingly, Bumble’s job cuts come barely two months after a major leadership change. In November, founder Herd stepped down as CEO and transitioned into the role of executive chair. Jones, the former CEO of the workplace messaging platform Slack, replaced her in January. Bumble’s stock fell 8% after the leadership transition was announced.

Losing steam: Bumble’s woes are hardly unique. Dating apps across the board, including Match Group’s platforms, are grappling with waning revenue. Users, particularly those under 30, are increasingly reluctant to splurge on premium add-ons. They also want more unique and diverse experiences than dating-app algorithms currently allow.

As writer and professor Apryl Williams writes in Time magazine, dating apps’ algorithms largely work to maintain the status quo.

“If dating apps continue to follow the tech industry’s trend of building algorithms that accept and amplify outdated forms of social injustice, they will fail their burgeoning and diverse user base,” she writes. “Some of us do strive for deep bonds that transcend social ideals about race, body type, and upbringing… Dating companies should design for this growing margin of users in service of a better experience for their entire user base, and frankly, for the sake of our culture.”

It’s not that companies are not trying. To draw the attention of Gen Z users, online dating platforms are employing various strategies. Tinder, for example, is focusing on long-term relationships, recognizing the shift in Gen Z’s preferences. Meanwhile, Hinge is leaning towards promoting face-to-face interactions, with sponsorships for singles events in a last-ditch effort to revive user growth.

But despite the efforts, there is growing consensus that dating apps, once considered an effective way to forge romantic connections in an increasingly tech-driven world, are broken.