You might assume the biggest news from Match Group’s first-quarter earnings report is Tinder’s revival. After consecutive quarters of declining revenue, the dating app has posted a slight uptick. But a more telling moment came when the chief financial officer mentioned the company is slowing its hiring to free up funds for AI tools for employees. Yes, the classic “blame it on AI” approach. During the earnings call with analysts, Match Group CFO Steven Bailey discussed how the company is investing in AI technology for internal use—and how it’s funding that investment. “We’re making a big push around AI enablement. We’re giving every employee in the company access to all the cutting-edge tools. We’re giving them the training they need to succeed. We’re setting expectations. We really want to become an AI-native company,” Bailey said. “We think it’s a huge opportunity. But these tools cost a lot of money, as I’m sure you know, and so the way we’re helping to pay for that is by slowing our hiring plans for the rest of the year,” he added. The company assured investors the move would be cost-neutral, with reduced hiring and lower headcount offsetting the higher software expenses. Plus, Match Group is betting that the productivity gains from employees using AI will ultimately boost revenue growth, the CFO explained.

At first glance, this seems like yet another instance of AI replacing human jobs—in this case, forcing a company to cut back on open positions. However, there’s likely more nuance to the situation. Keep in mind that Match Group’s flagship app, Tinder, has faced challenges in recent years. This quarter might signal the beginning of a recovery, as monthly active users fell by 7% in March—a much smaller decline than the 10% drop a year earlier. Tinder also saw its first growth in registrations since 2024, though it was a modest 1%, as Bloomberg noted. This could be a positive sign for Tinder, or it might just be a temporary blip driven by users’ curiosity about product improvements and new features, like IRL events. Only time will tell.

Dating meets a generational shift

Match Group remains a company that must work harder to extract more revenue from a shrinking, less engaged user base—something it managed to do this quarter. Revenue reached $864 million in the first quarter, up 4% year-over-year. However, next-quarter estimates are lower, projected at $850–$860 million, representing a 2% decline to flat growth. These struggles follow months of growing disinterest in dating apps among younger people. This generational shift sees individuals opting to meet in real life, perhaps by pursuing hobbies like running, book clubs, or other interests that connect them with others, expanding their social circles and increasing their chances of meeting someone new. This trend aligns with a resurgence of nostalgic technology, such as digital cameras, flip phones, boomboxes, and even landlines, signaling a generation tired of constant connectivity and seeking analog pleasures.

Match Group is aware of this significant shift and says it’s adapting by increasing its own IRL events. “Gen Z desperately wants to connect. They know they want to meet new people. They just want to do it in a low-pressure, low-stakes way that doesn’t feel like a job interview,” Match CFO Rascoff told investors on the call. “Traditional dating apps are very highly structured and can be intimidating to a user under 30. So, I think the growth of these alternative ways to meet new people speaks to how Gen Z is trying to find lower-pressure ways to connect.” He added, “We’ve obviously adapted our roadmap to this reality.”