According to Jonah Peretti, CEO of Buzzfeed, the company will reduce its employees by 15% and shut down its news website. It occurs as the digital media organisation deals with significant financial difficulties, such as a decline in advertising spending.
Peretti described the choices as “deeply painful” and said he was unable to make additional investments in the unsuccessful news site. He declared that the company would concentrate on disseminating news through the HuffPost, which Buzzfeed acquired two years ago.
“Our industry is hurting and ready to be reborn,” he said in a memo to staff. “We are taking great pains today, and will begin to fight our way to a bright future.”
Buzzfeed, which was founded in 2006, was once one of the most well-known brands in internet media. It was renowned for both its serious news operation and its quizzes and other viral material.
However, the company, which at the end of the previous year had more than 1,300 employees worldwide, has moved away from news as other business segments, such creating personalised content, have grown more fast.
In 2021, it went public on the stock market, but it raised a lot less money than it had anticipated.
“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,” Mr Peretti wrote to staff.
A lot of other advertising-dependent businesses, including media organisations and internet behemoths like Facebook’s owner Meta, have been laying off employees recently, and investors have been forced to reconsider the worth of up-and-coming news ventures like Vice News and Vox Media. On Thursday, the news organisation Insider also disclosed plans to cut roughly 95 employees, or 10%, from its workforce.
Peretti claimed that his firm, which will continue to run HuffPost, Tasty, Complex Networks, and its own website, had faced greater difficulties, but he also took responsibility for them.
He claimed that because major digital platforms control the distribution of online news, he had been “slow to accept” the challenges of making money from it. He stated that the company should have made more money after purchasing Complex in 2021, which manages the music website Complex and other businesses.
“I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances.” he said.
Buzzfeed News editor-in-chief Karolina Waclawiak claimed the company should have tried to establish a business around its news site sooner and called the closure “avoidable” in her own message to colleagues, some of which she shared on social media.
She claimed that the failure was a sign of a larger crisis in journalism and expressed anxiety for what would happen if solely subscription-based news models persisted.
“The implication is that only people who can afford to pay for it will have access to high quality information while everyone else will need to parse through the rampant misinformation that is widely shared across social platforms,” she wrote. “The consequences of this are dire.”
Several rounds of layoffs at Buzzfeed have already been reported in recent years, including one in December that affected about 170 individuals, or 12% of the workforce.
The most recent job losses affect 180 people. Buzzfeed stated that it anticipated moving-related severance and other costs to range between $7 million (£5.6 million) to $11 million.
The corporation stated that some of the press staff may find positions in other departments.
Following the revelation, shares dropped 20% on Thursday, bringing Buzzfeed’s market value down to approximately $100 million, a significant decrease from the above $1.5 billion (£1.2 billion) price investors reportedly discussed just two years earlier.
(Adapted from NYTimes.com)
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