BuzzFeed will shut down its news division and cut its workforce by 15 per cent as the digital media group seeks to slash costs and focus on profitable parts of its operations.
The decision to close its award-winning news operation is the latest attempt to reverse the decline in the business, which was once lauded as the future of digital media because of its catchy use of memes, emoji and listicles.
About 180 employees will lose their jobs, including those in business, content, technology and administrative teams, according to a memo sent to staff from chief executive Jonah Peretti.
BuzzFeed is also planning to cut jobs in some international markets. It currently employs 1,200 people.
Shares dropped sharply on opening in New York, and were down almost 25 per cent lower in mid-morning trading, leaving the group with a market value of just £98.6mn.
In 2021, BuzzFeed agreed to go public in a deal with a blank-cheque company that gave the group an implied valuation of $1.5bn. At the time the group was seeking to build an online media brand to compete with tech giants such as Facebook.
The company said that it was focusing only on parts of the business that could add to 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 overinvesting in BuzzFeed News “because I love their work and mission so much”. This has made him “slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media,” he said.
He also took responsibility for not holding “the company to higher standards for profitability, to give us the buffer needed to manage through economic and industry downturns and avoid painful days like today”.
Peretti said in the memo that BuzzFeed had “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”.
While Peretti said some of the changes to its commercial teams reflected BuzzFeed “beginning to bring AI enhancements to every aspect of our sales process”, the company later said that no jobs would be replaced by AI.
BuzzFeed bought Complex Networks, a digital publisher focused on streetwear and pop culture, from Verizon and Hearst for $200mn in cash and $100mn of equity in 2021.
In the memo, Peretti also blamed the slow integration process of BuzzFeed and Complex, saying that “we had the potential to generate much more revenue than we delivered over the past 12 months”.
Edgar Hernandez, chief revenue officer, and Christian Baesler, chief operating officer, will both leave the company, with Marcela Martin, president, taking on responsibility for revenue-making operations.