April 21, 2023: BuzzFeed is laying off 15% of staff and shutting down its news unit, BuzzFeed CEO Jonah Peretti noted in an email to staff Thursday.
The layoffs will impact BuzzFeed’s firm, content, administration and tech teams. The layoffs amount to about 180 people. As of its most recent securities filing, the company’s staff totalled 1,200 people.
BuzzFeed News, part of the digital media firm’s content division, had 100 employees and lost regarding $10 million a year, two people acquainted with the matter told in the previous year. It stood apart from the leading, viral-content-creating BuzzFeed brand with straight news and investigative reporting. BuzzFeed News is winning a Pulitzer Prize in 2021, which reports on China’s mass detention of Muslims. Several large shareholders urged Peretti to shut down its news operations.
Shares of the company have decreased by about 90% since its IPO in late 2021. They were down more than 23% Thursday, trading around 71 cents.
The news comes during a challenging period for digital media companies as publishers cut staff and advertisers reduce spending. These cuts have impacted companies like Wall Street Journal publisher Dow Jones and Vox Media. In January that Vice Media restarted its sale process at a lower valuation. The company, valued at $5.7 billion in 2017, was poised to fetch a price below $1 billion.
“There’s no free lunch anymore in the [digital media] space in the sense that the advertising market this year is not particularly strong, and everything has to be earned,” said Jonathan Miller, the CEO of Integrated Media, which specializes in digital media investments.
Miller added that there are better strategies for digital media companies like Buzzfeed than going public. “There’s not that many public companies in digital media. And I think investment dollars, in general, will be tough to come by unless you can show a real differentiated plan.”
BuzzFeed was one of many digital media companies to announce layoffs Thursday. According to an internal memo, insider, owned by German conglomerate Axel Springer, told staff Thursday morning it was decreasing its total headcount by 10%, which includes union and non-union staffers. The memo says that affected employees will receive at least 13 weeks of base pay, and medical benefits will be covered through August.
Insider executives said layoffs have stemmed from a significant recession in advertising spending in technology and finance and disruptions to distribution and revenue share.
“As you know, your firm has been under huge pressure for over a year. The headwinds that have hurt many of my clients and partners are affecting us,” Insider President Barbara Peng noted in the memo. “Hence, to keep our firm healthy and competitive, we need to decrease the size of our team. We have trying hard to avoid taking this step, and we apologize for the impact it will have on many of you.”
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