By Natalie Sherman
Business reporter, New York
Buzzfeed is to close its news site and cut its workforce by 15%, chief executive Jonah Peretti has said.
It comes as the digital media company faces serious financial challenges, including a slump in advertising spending.
Calling the decisions “deeply painful”, Mr Peretti said he could not invest more in the unprofitable news site.
He said the firm would focus on delivering news via the HuffPost, which Buzzfeed took over two years ago.
“Our industry is hurting and ready to be reborn,” he said in a memo to staff. “We are taking great pains today, and will begin to fight our way to a bright future.”
Founded in 2006, Buzzfeed was once one of the trendiest names in online media, known for its quizzes and viral content, as well as a serious news operation.
But the firm, which employed more than 1,300 people globally at the end of last year, has shifted away from news, as bringing in ad revenue and audiences became more difficult and other lines of business, such as producing custom content, grew more quickly.
It listed on the stock exchange in 2021, but raised far less money than it had hoped.
“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 organization,” Mr Peretti wrote to staff.
Many other advertising-reliant companies, including media firms and tech giants such as Facebook’s owner Meta, have been making job cuts in recent months, while investors have been forced to reassess the values of upstart news ventures such as Vice News and Vox Media. News company Insider also revealed plans on Thursday to reduce its workforce by 10% or about 95 jobs.
Mr Peretti said his company, which will continue to operate HuffPost, its food brand Tasty, Complex Networks, and its namesake website, had faced wider challenges but he also blamed himself.
He said he had been “slow to accept” the difficulties of making money from online news with distribution dominated by big tech platforms. The firm should have generated more revenue after acquiring Complex in 2021, which runs the music site Complex and other brands, he added.
“I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances.” he said.
In her own memo to staff, parts of which she shared on social media, Buzzfeed News editor-in-chief Karolina Waclawiak said the company should have tried to build a business around its news site earlier, describing the closure as “avoidable”.
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She said 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.
“The implication is that only people who can afford to pay for it will have access to high quality information while everyone else will need to parse through the rampant misinformation that is widely shared across social platforms,” she wrote. “The consequences of this are dire.”
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. 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, the company said.
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.
