BuzzFeed shuts down news division amid wider layoffs

Updated Thu, Apr 20, 2023, 9:51 AM 4 min read

According to an internal memo obtained by Yahoo Finance, the company said the shutdown is part of layoffs that will impact 15% of staffers, or about 180 employees, in order to make the business "more agile and focused." As part of that effort, the company will also be reducing budgets, open roles, real estate, and most other non-revenue generating expenditures.

"While layoffs are occurring across nearly every division, we've determined that the company can no longer continue to fund BuzzFeed News as a standalone organization," BuzzFeed CEO Jonah Peretti wrote in a memo to employees, explaining the company will now concentrate its news efforts at its HuffPost brand.

BuzzFeed stock sank as much as 26% on Thursday following the news.

NasdaqCM - Delayed Quote USD

(BZFD)

1.7200

+(5.52%)

At close: April 22 at 4:00:02 PM EDT

Advanced Chart

Peretti had been a long-standing champion of BuzzFeed News, explaining he made the decision to over-invest in the division "because I love their work and mission so much," he wrote in the memo.

"This made me slow to accept that the big platforms wouldn't provide the distribution or financial support required to support premium, free journalism purpose-build for social media," he continued, adding: "Please know that we exhausted many other cost savings measures to preserve as many jobs as possible."

Peretti said he regrets not holding the company to a higher standard for profitability, especially amid industry downturns and economic uncertainty. He admitted he could have better managed those challenges as CEO and the leadership team could have performed better.

NEW YORK, NEW YORK - DECEMBER 06: BuzzFeed CEO Jonah Peretti stands in front of the Nasdaq market site in Times Square as the company goes public through a merger with a special-purpose acquisition company on December 06, 2021 in New York City. Shares of the digital media company, trading under the new ticker “BZFD,” rose 12.7% to $10.84 as markets opened Monday. (Photo by Spencer Platt/Getty Images) · Spencer Platt via Getty Images

The company struggled after going public via a special purpose acquisition company, or SPAC, in 2021 with the stock falling more than 90% since that time.

BuzzFeed's struggles after going public deterred fellow media giants like Vice and Bustle from completing their own SPAC deals. Last March, former and current employees filed a lawsuit against Buzzfeed, claiming the company mishandled the public offering and prevented them from selling shares at a higher price allegedly worth millions.

"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," Peretti said.