Buzzfeed — The technology sector began a wave of significant layoffs in late 2022 that would endure until 2023.
BuzzFeed, a journalism and media company, observed a similar trend.
During the internet age, the digital media firm prospered, but that is going to change.
BuzzFeed CEO John Peretti notified employees on Thursday that the firm is cutting off 15% of its workforce and closing its news division.
The decision would have far-reaching repercussions for the corporation’s administrative, economic, content, and technology divisions.
More than 180 workers will be let go.
BuzzFeed employs around 1,200 workers, according to the company’s most recent securities filing.
BuzzFeed News is the content part of the digital media firm, and it employs over 100 individuals.
According to two persons familiar with the matter, the branch loses around $10 million every year.
By providing legitimate news and investigative reporting, BuzzFeed positioned itself as the leading source of viral material.
In 2021, BuzzFeed News was awarded the Pulitzer Prize for its coverage of Muslim incarceration in China.
Despite the success of the branch, a few wealthy owners petitioned John Peretti to close it.
The company’s shares have dropped by more than 90% since its IPO in late 2021.
On Thursday, the stock fell more than 20% to 75 cents.
The allegations come at a challenging time for digital media organizations, as publishers lay off workers and advertisers cut back on expenditure.
Budget cuts have hurt publications such as the Wall Street Journal, Dow Jones, and Vox Media.
Vice Media started selling in January, although at a cheaper cost.
The firm was worth $5.7 billion in 2017, and it was projected to be sold for less than $1 billion in 2018.
According to Jonathan Miller, CEO of Integrated Media, a digital media investment firm:
“There’s no free lunch anymore in the [digital media] space in the sense that the advertising market this year is not particularly strong, and everything has to be earned.”
Miller also claimed that going public with a digital media company like Buzzfeed would be an unwise move.
“There’s not that many public companies in digital media,” he said.
“And I think investment dollars in general will be tough to come by unless you can show a real differentiated plan.”
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BuzzFeed isn’t the only digital media business to lay off a large number of employees.
Insider, owned by the German firm Axel Spring, has informed its employees that 10% of its personnel would be laid off.
The warning was sent via email to both union and non-union staff.
Affected employees will get a minimum of 13 weeks of basic income, according to the letter.
Their medical insurance will remain valid until August as well.
The layoffs were reportedly caused by a major fall in advertising expenditure in technology, finance, and distribution, as well as revenue share interruptions.
“As you know, your industry has been under significant pressure for more than a year,” Insider President Barbara Peng wrote.
“The economic headwinds that have hurt many of our clients and partners are also affecting us.”
“Unfortunately, to keep our company healthy and competitive, we need to reduce the size of our team.”
“We have tried to avoid taking this step, and we are sorry about the impact it will have on many of you.”
According to John Peretti, HuffPost and BuzzFeed’s flagship site is looking for BuzzFeed News editors and writers for a variety of positions.
Furthermore, the company is decreasing expenditure, hiring, and other non-essential costs.
“We’ve 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,” he wrote.
Peretti feels he could have handled the transition more effectively.
He also expressed reservations about admitting that huge platforms could not offer the required distribution or financial support for high-quality, free social media content.
BuzzFeed’s CEO also announced the resignations of sales chief Edgar Hernandez and operations executive Christian Baesler.
BuzzFeed laid off around 180 employees, or 12% of its employment, in December 2022.
The layoffs were announced in reaction to BuzzFeed’s acquisition of Complex Networks.
BuzzFeed will also downsize its presence in New York in 2022.
It also shuttered three of its four Los Angeles locations.
BuzzFeed’s journalistic efforts were reduced in order for the company to become more financially sustainable, however this resulted in the resignation of several editors.
In 2022, the firm went public via a special purpose acquisition vehicle, with shares dropping more than 40% in the first week of trade.
According to one investor, closing the newsroom might result in the stock hitting $300 million in value.
Furthermore, John Peretti claimed that the company intends to lay off staff in a number of other countries.