BuzzFeed closes news division and cuts jobs to weather digital media downturn
BuzzFeed will shut down its information division and reduce its workforce by 15 per cent because the digital media group seeks to slash prices and concentrate on worthwhile elements of its operations.
The choice to shut its award-winning information operation is the newest try and reverse the decline within the enterprise, which was as soon as lauded as the way forward for digital media due to its catchy use of memes, emoji and listicles.
About 180 staff will lose their jobs, together with these in enterprise, content material, expertise and administrative groups, in keeping with a memo despatched to workers from chief govt Jonah Peretti.
BuzzFeed can be planning to chop jobs in some worldwide markets. It at the moment employs 1,200 folks.
Shares dropped sharply on opening in New York, and have been down nearly 25 per cent decrease in mid-morning buying and selling, leaving the group with a market worth of simply £98.6mn.
In 2021, BuzzFeed agreed to go public in a cope with a blank-cheque firm that gave the group an implied valuation of $1.5bn. On the time the group was looking for to construct a web-based media model to compete with tech giants corresponding to Fb.
The corporate mentioned that it was focusing solely on elements of the enterprise that would add to its income. BuzzFeed and HuffPost will provide some roles to journalists in areas the place they need to develop protection.
Peretti blamed himself within the memo for overinvesting in BuzzFeed Information “as a result of I really like their work and mission a lot”. This has made him “gradual to just accept that the massive platforms wouldn’t present the distribution or monetary help required to help premium, free journalism purpose-built for social media,” he mentioned.
He additionally took duty for not holding “the corporate to greater requirements for profitability, to offer us the buffer wanted to handle by financial and business downturns and keep away from painful days like at this time”.
Peretti mentioned within the memo that BuzzFeed had “confronted extra challenges than I can depend prior to now few years: a pandemic, a fading Spac market that yielded much less capital, a tech recession, a tricky financial system, a declining inventory market, a decelerating digital promoting market and ongoing viewers and platform shifts”.
Whereas Peretti mentioned a number of the adjustments to its industrial groups mirrored BuzzFeed “starting to deliver AI enhancements to each facet of our gross sales course of”, the corporate later mentioned that no jobs would get replaced by AI.
BuzzFeed purchased Advanced Networks, a digital writer centered on streetwear and popular culture, from Verizon and Hearst for $200mn in money and $100mn of fairness in 2021.
Within the memo, Peretti additionally blamed the gradual integration means of BuzzFeed and Advanced, saying that “we had the potential to generate rather more income than we delivered over the previous 12 months”.
Edgar Hernandez, chief income officer, and Christian Baesler, chief working officer, will each depart the corporate, with Marcela Martin, president, taking over duty for revenue-making operations.