Buzzfeed, one of the world’s leading digital media companies, has announced it will shut down its news site, Buzzfeed News, and cut its workforce by 15%. The move comes amid serious financial challenges, including a decline in advertising spending. Jonah Peretti, the CEO of Buzzfeed, has called the decision “deeply painful,” stating that he could no longer invest in the unprofitable news site. Instead, Buzzfeed will focus on delivering news via HuffPost, which it acquired two years ago. The company, which once employed over 1,300 people globally, has seen a shift away from news and towards other lines of business, such as producing custom content.
The Background of Buzzfeed
Buzzfeed was founded in 2006 as a digital media company, known for its quizzes and viral content, as well as a serious news operation. Over the years, Buzzfeed has seen its popularity grow, and by the end of 2021, it had more than 1,300 employees globally. However, as the digital media landscape evolved, Buzzfeed faced increasing difficulties in bringing in ad revenue and audiences. This led the company to shift away from news and towards other lines of business, such as custom content production. In 2021, Buzzfeed listed on the stock exchange but raised far less money than it had hoped.
Buzzfeed’s financial struggles have been a matter of public record for some time. In December 2021, the company announced a round of layoffs that affected approximately 170 people or 12% of its staff. The latest cuts will see about 180 jobs lost. Buzzfeed said it expected to incur $7m – $11m in severance and other charges connected to the move.
The Future of Buzzfeed
Despite the closure of Buzzfeed News, Buzzfeed will continue to operate HuffPost, its food brand Tasty, Complex Networks, and its namesake website. Buzzfeed’s market value has been significantly reduced, falling by 20% on Thursday after the news was announced, to about $100m, a fraction of the more than $1.5bn valuation investors reportedly discussed just two years ago.
The Wider Picture
Buzzfeed is not alone in its struggles, as other advertising-reliant companies, media firms, and tech giants such as Facebook’s owner, Meta, have been making job cuts in recent months. Investors have also 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.
Buzzfeed’s decision to close its news site is a significant development, reflecting the broader struggles of digital media companies in the current economic climate. Despite the challenging circumstances, Buzzfeed remains committed to a bright future, as Peretti stated in his memo to staff.
- Why is Buzzfeed shutting down its news site? Buzzfeed is closing its news site due to serious financial challenges, including a decline in advertising spending.
- What will happen to Buzzfeed’s employees? Buzzfeed will cut its workforce by 15%, which will result in around 180 job losses. Some of the news staff may find roles in other parts of the firm.
- Will Buzzfeed continue to operate its other businesses? Yes, Buzzfeed will continue to operate HuffPost, its food brand Tasty, Complex Networks, and its namesake website.
- What is the current market value of Buzzfeed? Following the announcement, Buzzfeed’s market value has fallen to about $100m, a fraction of the more than 1.5bn valuation investors were reportedly discussing just two years ago.
- Is Buzzfeed the only company facing financial difficulties? No, other advertising-reliant companies, media firms, and tech giants such as Facebook’s owner, Meta, have also been making job cuts in recent months.
- Buzzfeed’s struggles highlight the broader challenges faced by digital media companies in the current economic climate. The decline in advertising spending has hit many companies hard, and Buzzfeed’s decision to close its news site is just one example of the difficulties they are facing. However, the company remains committed to a bright future, as Peretti stated in his memo to staff.
- Buzzfeed’s decision to focus on delivering news via HuffPost also demonstrates the company’s willingness to adapt to changing circumstances. By shifting its focus towards other lines of business, such as producing custom content, Buzzfeed hopes to weather the storm and emerge stronger in the future.
- The news of Buzzfeed’s closure of its news site and job cuts is undoubtedly disappointing for many, especially those who will be directly affected. However, as the digital media landscape continues to evolve, it is likely that we will see more companies taking similar steps to ensure their survival in the long term.