BuzzFeed shares fell more than 20% after CEO Jonah Peretti's announcement the company is closing its news division as part of a 15% workforce reduction affecting 180 jobs.
Key Points to Remember
- Buzzfeed News is closing to cut costs.
- BuzzFeed shares fell 20% after the announcement.
- CEO Peretti Says that the changes and improvements they bring “are necessary steps in building a better future”.
More than a dozen people affected by the move will be offered jobs at BuzzFeed.com and HuffPost, which was acquired by BuzzFeed in 2021. The News Guild union will be consulted on cost-cutting plans and what to expect. #39;they mean for concerned members, Peretti said.
Unprofitable BuzzFeed News
According to an anonymous BuzzFeed staffer who spoke to The New York Times, Peretti told employees he let them down. The move is meant to cut costs, and Peretti said he feels he's overinvested in BuzzFeed News because of his love for its work and its mission.
'It has made it hard for me to accept that the big platforms don't provide the distribution or financial backing needed to sustain premium, free journalism purpose-built for social media,' Peretti said, adding that these changes “are necessary steps to build a better future”.
Buzzfeed News, which won a Pulitzer Prize in 2021 for its series exposing China's mass detention of Muslims and a 2017 nomination for an expose on a corporate dispute resolution process, was not profitable.
Instead of a standalone platform, BuzzFeed will publish news on HuffPost, which Peretti says is cost effective without relying too heavily on social platforms. Going forward, the business will focus on the parts of the business that add to the profit margin of the business. BuzzFeed plans to archive all stories published by its news division on its website in perpetuity, according to a spokesperson.
Following an economic downturn, the rapid growth of tech companies in the wake of the pandemic has begun to fade. BuzzFeed is just one of many digital media companies to downsize, including ESPN, Spotify, Yahoo and Vimeo.
BuzzFeed went public via a merger with a special purpose acquisition company (SPAC) in December 2021 and its shares have lost more than 91% of their value since then.