BuzzFeed Inc. is shutting down its news division and cutting its workforce by 15 per cent.
The company made the news in an email to staff on Thursday from CEO Jonah Peretti, who said the cuts will amount to around 180 people. Some of those in the axed News unit will move over to the HuffPost brand, which the company acquired in 2020.
It’s the second round of layoffs since December at the company when the company cut 12 percent of its workforce.
“I made the decision to overinvest in BuzzFeed News because I love their work and mission so much,” Peretti told staff. “This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.”
BuzzFeed produces news, videos and online quizzes for free, and is supported by advertising revenue and brand partnerships.
No profitability, despite many readers and viewers
Dwayne Winseck, a professor in the journalism program at Carleton University in Ottawa, says that BuzzFeed is a great example of what’s ailing the media industry.
“It’s been kind of an icon of the Internet era from its launch in 2006 until now, and it’s contained the best and the worst of those … last 17 years,” he told CBC News in an interview.
According to ComScore data, BuzzFeed was the third most-trafficked website in Canada in 2021. “It has great reach,” Winseck said. “The problem here was that people visiting the sites, their attention was rather shallow [and] very short term and there’s just really no revenue attached to it.”
The company’s financial documents show that it took in $436 million in revenue last year, but failed to turn a profit. And it never has since going public in 2021.
“The bottom line problem facing all journalism is that it is a public good that people are able to access without paying for, and when it comes to opening up their wallets — very few … are willing to do so.”
The company went public in a reverse takeover by a SPAC company in 2021, a deal that came at a market top for such arrangements. The company’s shares have lost 93 percent of their value since going public.
‘More challenges than I can count’
Peretti’s email to staff says the company has “faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market, and ongoing audience and platform shifts.”
“Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending. But I also want to be clear: I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances. Our job is to adapt, change, improve, and perform despite the challenges in the world. We can and will do better.”
As part of the restructuring, the company said chief revenue officer Edgar Hernandez and chief operating officer Christian Baesler have decided to leave. President Marcela Martin will immediately take over all revenue functions.
The company recently started using AI technology to build some of its popular online quizzes and lists, but Peretti says none of the jobs lost on Thursday are being replaced by AI.
Source/CBC
