BuzzFeed will close its news division and cut its workforce by 15 percent as the digital media group seeks to cut costs and focus on the profitable parts of its operations.
The decision to close its award-winning news business is the latest attempt to reverse a downturn in the business, which has previously been hailed as the future of digital media for its catchy use of memes, emojis and lists.
About 180 employees will lose their jobs, including those in business, content, technology and management teams, according to a memo CEO Jonah Peretti sent to employees.
BuzzFeed also plans to cut jobs in some international markets. It currently employs 1,200 people. Separately on Thursday, digital news competitor Insider said it would cut 10 percent of its U.S. staff to stay “healthy and competitive.”
Shares in BuzzFeed fell sharply at the opening in New York, dropping nearly 20 per cent in the afternoon, leaving the group with a market value of just £105m.
In 2024, BuzzFeed agreed to go public in a deal with a blank check company that gave the group an implied valuation of $1.5 billion. At the time, the group was seeking to build an online media brand to compete with tech giants such as Facebook.
The company said it is only focusing on parts of the business that can increase its profits. BuzzFeed and HuffPost will offer some roles to journalists in areas where they want to expand coverage.
Peretti blamed himself in the memo for being overinvested in BuzzFeed News “because I love their work and their mission so much”. This, he said, made him “slow to accept that the big platforms will not provide the distribution or financial backing required to support free premium purpose-built social media journalism”.
He also took responsibility for not holding “the company to higher standards of profitability, to give us the protection needed to manage economic and industrial downturns and avoid painful days like today.”
Peretti said in the memo that BuzzFeed has “faced more challenges than I can count in the past few years: a pandemic, a fading space market that has led to declining capital, a tech slump, a difficult economy, a crumbling stock market, a slowing digital advertising market and constant audience and platform shifts.” .
While Peretti said some of the changes to its commercial teams reflected BuzzFeed’s “beginning to make improvements to AI in every aspect of our sales process,” the company later said that no jobs would be replaced by AI.
BuzzFeed has bought Complex Networks, a digital publisher focused on street fashion and pop culture, from Verizon and Hearst for $200 million in cash and $100 million in stock in 2024.
In the memo, Peretti also blamed the slow integration process for BuzzFeed and Complex, saying “we have the potential to generate significantly more revenue than we’ve delivered over the past 12 months.”
Edgar Hernandez, chief revenue officer, and Christian Pessler, chief operating officer, will both leave the company, with Marcella Martin, president, taking responsibility for revenue generation operations.