Buzzfeed is laying off 15% of staff and closing its news division amid a “decelerating ad market”, chief executive Jonah Peretti has told employees.
Laying out the company’s financial issues, Peretti noted that a “fading SPAC market” had undermined its public listing and fundraising in 2021. He also cited the “tech recession”, “decelerating digital advertising market and ongoing audience and platform shifts”.
On Thursday afternoon, after Peretti’s announcement, Buzzfeed’s share price plummeted more than 20%, leaving it with a market capitalisation of around $100million. At peak, in 2016, Buzzfeed boasted a private market valuation of $1.7billion.
In an email to staff, Peretti said that he had overinvested in Buzzfeed News because of his “love” for its work and mission, but that the tech platforms had been unwilling to help it survive.
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Peretti said the layoffs would occur across the business, content, technology and admin teams, and may affect headcounts in international markets.
His email comes the same day as digital-native publisher Insider announced it would lay off 10% of its staff in the US.
Peretti wrote: “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 organisation. As a result, we will engage with the Newsguild about our cost reduction plans and what this will mean for the affected union members.”
Buzzfeed News has for some years been tapering down from its mid-2010s strength. In 2017 it controversially broke one of the biggest stories of the decade by publishing in full the unverified Steele Dossier, which alleged the Russian state held compromising material against President-Elect Donald Trump.
But in the years that followed the news part of the business was hit with sequential cuts, as well as closures at its international newsrooms. The company cut 12% of its staff only four months ago.
“Moving forward, we will have a single news brand in Huffpost, which is profitable, with a loyal direct front page audience,” Peretti told staff. Some roles at Buzzfeed proper and Complex, the youth-focused media company it acquired in 2021 will be opened up to Buzzfeed News staff being made redundant. Chief revenue officer Edgar Hernandez and chief operating office Christian Baesler will also both exit the company.
[Read more: Buzzfeed’s bumpy ride post-public listing, charted]
He added that company management should have executed the unification of Buzzfeed and Complex “faster and better… we had the potential to generate much more revenue than we have delivered over the past 12 months”.
Peretti said that looking ahead Buzzfeed would focus “on reducing layers in [the] organisation, increasing speed and effectiveness of pitches, streamlining our product mix, doubling down on creators and beginning to bring AI enhancements to every aspect of our sales process”.
With regards to Buzzfeed News in particular, he said he had “made the decision to overinvest in Buzzfeed News because I love their work and mission so much.
“This made me slow to accept that the big platforms wouldn’t provide the distribution of financial support required to support premium, free journalism purpose-built for social media.”
The tech giants that enabled Buzzfeed News’ viral success have in large part made their money by monopolising the digital advertising market – but in the process much of that adspend has been diverted away from news publishers. Although Google and Meta have to some extent voluntarily offered financial support to newsrooms, industry bodies have increasingly been leaning on legislators to force big tech to share their profits with the journalism industry.
Being a social media-focused news operation also left Buzzfeed News vulnerable to the platforms’ strategic pivots, and its traffic withered on Facebook as the social network attempted to alter the ways its users interacted with content.
[Read more: Buzzfeed founder Jonah Peretti says Facebook and Google will be regulated unless they do more to ‘support news’]
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