Recently, Buzzfeed announced it would undergo significant staffing cuts, and the Buzzfeed News segment would shut down entirely.
Buzzfeed will cut 15 percent of its 1200-person staff, and its stock price was down below $1 compared to $9.61 per share in December 2021. Buzzfeed news has reportedly been unprofitable since it was launched nearly a decade ago. CNBC reported:
BuzzFeed News, part of the digital media company’s content division, had about 100 employees and lost about $10 million a year, two people familiar with the matter told CNBC last year. It stood apart from the main, viral-content-generating BuzzFeed brand with straight news and investigative reporting.
CEO Jonah Peretti announced in a memo, “While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization.”
“We’ve faced more challenges than I can count in the past few years,” Peretti continued. “Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.”
Additionally, I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media. More broadly, I regret that I didn’t hold the company to higher standards for profitability, to give us the buffer needed to manage through economic and industry downturns and avoid painful days like today. Our mission, our impact on culture, and our audience is what matters most, but we need a stronger business to protect and sustain this important work. Please know that we exhausted many other cost saving measures to preserve as many jobs as possible. We are reducing budgets, open roles, travel and entertainment, and most other discretionary, non-revenue generating expenditures. Just as we reduced our footprint in NYC last year, we will be reducing our real estate in Los Angeles from four buildings down to one, which saves millions in costs as well as mirrors our current hybrid state of work.
I’ve learned from these mistakes, and the team moving forward has learned from them as well. We know that the changes and improvements we are making today are necessary steps to building a better future.
In December, Buzzfeed cut 12% of its workforce, and Buzzfeed News cut 1.7% of its staff in March 2022. At the time, Buzzfeed was on a cost-cutting campaign dealing with the declining revenue from ad-spend and delays in other projects. “In order for BuzzFeed to weather an economic downturn that I believe will extend well into 2023, we must adapt, invest in our strategy to serve our audience best, and readjust our cost structure,” CEO Jonah Peretti said in a memo to employees.
CNBC reported on the headwinds the digital media industry is facing overall:
The news comes during a tough period for digital media companies as publishers are cutting staff as advertisers reduce spending. These cuts have impacted companies like Wall Street Journal publisher Dow Jones and Vox Media. In January, Vice Media restarted its sale process at a lower valuation, CNBC previously reported. The company, which was valued at $5.7 billion in 2017, was poised to fetch a price of below $1 billion.
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