Buzzfeed UK lost £22.8m in five years before closing news operation

Buzzfeed

Buzzfeed UK’s final full-year accounts before its London-based news division was shut down show its failed attempt to cut costs against continuing losses and falling UK revenue.

The group’s accounts for 2019, which include Buzzfeed’s teams in the UK as well as Germany, Japan, Mexico and India, show turnover in the UK fell by almost a third (31%), from £6.6m to £4.6m.

Losses before tax actually fell by 17% from £8.9m in 2018 to £7.4m, but brought the total losses since 2015 for the UK group to £22.8m

After a number of redundancies and restructures, the group’s editorial staff fell from 164 in 2018 to 74. Total staff numbers dropped 18% from 265 to 217, but staff costs fell by just 4.5% from £17.4m to £16.6m.

The UK editorial team was cut by half in January 2019, a year after losing 23 staffers, as part of the company shedding about 15% of its global workforce.

At the same time, Buzzfeed closed its Spanish operation, which its accounts described “as part of the group’s strategy and commitment to sustaining its international presence through mitigation of its losses”. The news division in Mexico also closed.

Buzzfeed closed its UK and Australian newsrooms in May this year and sold its German brands to online publisher Ippen Digital.

Buzzfeed UK continues to publish global celebrity news and quizzes.

Buzzfeed UK’s group revenue, which primarily came from social content advertising sold to brands, grew by 4% to £22.4m in 2019 thanks to growth from its sites in Europe and the rest of the world.

The latest financial statement said the group now has a “strong focus on cash preservation and cost management to ensure the sustainability of the business going forward” as the Covid-19 crisis continues amid a threat from “significant uncertainty in the macroeconomic conditions which may cause business slowdowns, depress demand for the group’s advertising business and adversely impact its operations”.

The group’s long-term strategy is to diversify group turnover by expanding further into areas such as affiliate marketing, licensing and programmatic advertising sales.

The accounts stated the financial results were in line with expectations from Buzzfeed’s directors including chief executive Jonah Peretti.

Buzzfeed UK’s net liabilities grew slightly from £10.4m at 31 December 2018 to £11.3m a year later.

Buzzfeed’s global operation is expecting to break even this year for the first time since 2014 as a result of its cost cutting measures, according to the Wall Street Journal.

Picture: Reuters/Brendan McDermid

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