BuzzFeed closes news division and cuts jobs to weather digital media downturn

BuzzFeed will shut down its information division and reduce its workforce by 15 per cent because the digital media group seeks to slash prices and deal with worthwhile components of its operations.

The choice to shut its award-winning information operation is the newest try and reverse the decline within the enterprise, which was as soon as lauded as the way forward for digital media due to its catchy use of memes, emoji and listicles.

About 180 workers will lose their jobs, together with these in enterprise, content material, know-how and administrative groups, in accordance with a memo despatched to workers from chief govt Jonah Peretti.

BuzzFeed can also be planning to chop jobs in some worldwide markets. It at the moment employs 1,200 individuals.

Shares dropped sharply on opening in New York, and had been down nearly 25 per cent decrease in mid-morning buying and selling, leaving the group with a market worth of simply £98.6mn. 

In 2021, BuzzFeed agreed to go public in a cope with a blank-cheque firm that gave the group an implied valuation of $1.5bn. On the time the group was in search of to construct an internet media model to compete with tech giants equivalent to Fb.

The corporate stated that it was focusing solely on components of the enterprise that would add to its income. BuzzFeed and HuffPost will provide some roles to journalists in areas the place they wish to broaden protection.

Peretti blamed himself within the memo for overinvesting in BuzzFeed Information “as a result of I like their work and mission a lot”. This has made him “sluggish to just accept that the large platforms wouldn’t present the distribution or monetary assist required to assist premium, free journalism purpose-built for social media,” he stated.

He additionally took duty for not holding “the corporate to increased requirements for profitability, to provide us the buffer wanted to handle by financial and trade downturns and keep away from painful days like right this moment”.

Peretti stated within the memo that BuzzFeed had “confronted extra challenges than I can rely up to now few years: a pandemic, a fading Spac market that yielded much less capital, a tech recession, a troublesome economic system, a declining inventory market, a decelerating digital promoting market and ongoing viewers and platform shifts”.

Whereas Peretti stated among the adjustments to its industrial groups mirrored BuzzFeed “starting to carry AI enhancements to each side of our gross sales course of”, the corporate later stated that no jobs would get replaced by AI.

BuzzFeed purchased Complicated Networks, a digital writer centered on streetwear and popular culture, from Verizon and Hearst for $200mn in money and $100mn of fairness in 2021.

Within the memo, Peretti additionally blamed the sluggish integration strategy of BuzzFeed and Complicated, saying that “we had the potential to generate way more income than we delivered over the previous 12 months”. 

Edgar Hernandez, chief income officer, and Christian Baesler, chief working officer, will each go away the corporate, with Marcela Martin, president, taking up duty for revenue-making operations.

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