BuzzFeed has announced the closure of its BuzzFeed News division as part of a larger effort to revive the struggling media group and extract profits from a company that has seen a 90% drop in value since its 2021 listing.
This decision emphasizes the difficulties confronting the digital media sector and highlights the company’s failure to promptly address revenue generation and expense management concerns.
It is worth mentioning that BuzzFeed News had received several awards, including a Pulitzer Prize, prior to its closure. Many journalists, both within and outside the company, expressed sorrow over the demise of this esteemed news organization.
According to a memo addressed to the employees, CEO Jonah Peretti acknowledged a significant part of the responsibility for the downfall of the news division. He stated that he had over-invested in the business and relied too heavily on social media distribution.
Furthermore, Peretti also highlighted other areas where he and his team mismanaged, specifically mentioning the integration process of BuzzFeed and Complex, as well as the unification of the two business organizations. He admitted that these initiatives should have been executed more efficiently and expeditiously.
Peretti also stated that BuzzFeed, the parent company of media outlets BuzzFeed News, HuffPost, Complex, and Tasty, plans to reduce its workforce by 15%. He added that BuzzFeed News would initiate its shutdown on Thursday.
A Warning for the Digital Media Industry
As per a source familiar with the matter, BuzzFeed News currently employs around 60 individuals. BuzzFeed and HuffPost have reportedly offered positions to certain BuzzFeed News employees affected by the shutdown.
Peretti further added that in the future, the company will have a sole news brand in HuffPost, which is a profitable media outlet with a dedicated direct front page audience.
The company’s overall workforce reduction will impact approximately 180 individuals, including chief revenue officer Edgar Hernandez and chief operating officer Christian Baesler. BuzzFeed’s president, Marcela Martin, will assume responsibility for revenue-related matters.
In the grand scheme of things, BuzzFeed’s trajectory serves as a warning for its peers in the digital media industry. The company, once considered a digital media darling, went public through a SPAC in 2021, a move that has contributed to its present situation. When BuzzFeed initially went public, it had a valuation of over $700 million.
A Sign of Changing Times in the Digital Media Landscape
At the same time as its public listing, BuzzFeed also declared its acquisition of Complex Networks, an entertainment company.
After the announcement of the BuzzFeed News division’s shutdown and the company’s plans for workforce reduction, the company’s stock value decreased by 20% to 71 cents per share on Thursday. Presently, BuzzFeed has a market value of approximately $100 million.
The layoffs on Thursday are the most recent in a series of large-scale job cuts that have occurred within the media industry in the past year, with BuzzFeed being no exception. Last year, the company had offered voluntary buyouts to approximately one-third of its 100 news division employees as part of its cost-cutting measures.
On Twitter, past and present BuzzFeed employees expressed their sadness regarding the closure of BuzzFeed News.
Tom Namako, who was previously the deputy editor-in-chief at BuzzFeed News and now works at NBC News, expressed his disappointment on Twitter, tweeted, “BuzzFeed News deserved so much better, and has for a long time.”
Alexander Kaufman, a senior reporter at HuffPost, also took to Twitter to express his thoughts on the closure of BuzzFeed News, tweeted, “BuzzFeed News funneled venture capital into something genuinely very useful and necessary: High-quality reporting freely available for anyone to read. It was the envy of every reporter who entered journalism in the chaotic 2010s and didn’t work there. What a loss.”
The era of digital media that BuzzFeed once epitomized is now a thing of the past.