Buzzfeed News Shutting Down as Company Slashes Jobs
Buzzfeed, the digital media company that was once known for its viral content and serious news operation, is shutting down its news site and laying off 15% of its workforce due to serious financial challenges. This decision comes as the firm faces a slump in advertising spending and struggles to generate ad revenue and audiences. Buzzfeed CEO Jonah Peretti called the decisions "deeply painful" and said that he could not invest more in the unprofitable news site.
Peretti announced that the company would instead focus on delivering news via the HuffPost, which Buzzfeed took over two years ago. The firm will also continue to operate its food brand Tasty, Complex Networks, and its namesake website. However, the decision to shut down its news site will result in the loss of approximately 180 jobs.
Buzzfeed was founded in 2006 and employed over 1,300 people globally at the end of last year. However, the company has shifted away from news in recent years, as other lines of business, such as producing custom content, grew more quickly. Buzzfeed listed on the stock exchange in 2021 but raised far less money than it had hoped.
In a memo to staff, Peretti said that the company had faced wider challenges, but he also blamed himself for being "slow to accept" the difficulties of making money from online news with distribution dominated by big tech platforms. He also stated that the company should have generated more revenue after acquiring Complex in 2021.
The closure of Buzzfeed's news site has been described as "avoidable" by Buzzfeed News editor-in-chief Karolina Waclawiak. She said that the failure was indicative of a wider crisis in journalism and she feared the results if subscription-based news models were the only ones that survive.
Buzzfeed had already announced several rounds of layoffs in recent years, including one in December that affected roughly 170 people or 12% of staff. The latest cuts involve about 180 jobs, and Buzzfeed said it expected to incur $7m (£5.6m) - $11m (£8.8m) in severance and other charges connected to the move. Some of the news staff may find roles in other parts of the firm.
Shares fell 20% on Thursday on the news, reducing Buzzfeed's market value to about $100m (£80m) - a fraction of the more than $1.5bn (£1.2bn) valuation investors were reportedly discussing just two years ago.
Buzzfeed's decision to close its news site and cut its workforce comes as the media industry is facing tough financial challenges due to the COVID-19 pandemic. With many businesses cutting back on advertising spending, digital media companies like Buzzfeed are struggling to generate revenue.
Despite its financial troubles, Buzzfeed remains a major player in the media landscape. The company has a loyal following on social media, with millions of followers across various platforms. In addition to its news site, Buzzfeed is known for its quizzes, lists, and viral content.
Buzzfeed's decision to focus on delivering news via HuffPost is part of a larger trend in the media industry towards consolidation. Many media companies are merging or partnering with one another in order to cut costs and increase their reach.
The closure of Buzzfeed's news site is a blow to the journalism industry, which has been struggling to adapt to the digital age. With more and more people turning to social media for their news, traditional news outlets are finding it difficult to compete.
The closure of Buzzfeed's news site also raises questions about the future of online news. With many media companies struggling to generate revenue, it remains to be seen whether subscription-based news models will become the norm.
Buzzfeed's decision to cut its workforce by 15% will have a significant impact on its employees, many of whom will be left without jobs. The move is part of a larger trend in the tech industry towards automation and cost-cutting.
Despite its financial troubles, Buzzfeed remains optimistic about its future. In a memo to staff, CEO Jonah Peretti said that the company was "taking great pains today, and will begin to fight our way to a bright future." The company plans to focus on its remaining brands, including HuffPost and Tasty.