Buzzfeed — In late 2022, the technology industry launched a wave of substantial layoffs that would last until 2023.
A similar pattern was noticed by BuzzFeed, a journalism and media organization.
The digital media corporation thrived during the internet era, but that is about to change.
On Thursday, BuzzFeed CEO John Peretti informed staff that the company is laying off 15% of its personnel and liquidating its news business.
The decision would have far-reaching consequences for the corporation’s administrative, financial, content, and technological divisions.
More than 180 employees will be laid off.
According to the company’s most recent securities filing, BuzzFeed employs around 1,200 people.
BuzzFeed News is the digital media company’s content division, and it employs over 100 people.
According to two people acquainted with the situation, the branch loses around $10 million every year.
BuzzFeed established itself as the top source of viral content by offering credible news and investigative reporting.
BuzzFeed News won the Pulitzer Prize in 2021 for their reportage of Muslim detention in China.
Despite the branch’s success, a few affluent owners petitioned John Peretti to shut it down.
Since its IPO in late 2021, the company’s stock has plunged by more than 90%.
The shares dropped more than 20% to 75 cents on Thursday.
The charges come at a difficult moment for digital media companies, as publishers lay off employees and advertisers cut back on spending.
The Wall Street Journal, Dow Jones, and Vox Media have all suffered as a result of budget cuts.
Vice Media began selling in January, but at a lower price.
In 2017, the company was valued at $5.7 billion, and it was expected to be sold for less than $1 billion in 2018.
Jonathan Miller, CEO of Integrated Media, a digital media investment business, stated:
“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 stated that going public with a digital media firm such as Buzzfeed would be a bad idea.
“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 company that has laid off a substantial number of workers.
Insider, which is owned by the German company Axel Spring, has told its staff that 10% of its workforce would be put off.
The warning was distributed via email to both union and non-union employees.
According to the letter, affected employees would receive a minimum of 13 weeks of basic income.
Their medical insurance will also be good until August.
According to reports, the layoffs were triggered by a significant decrease in advertising expenditure in technology, finance, and distribution, as well as revenue share disruptions.
“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.”
HuffPost and BuzzFeed’s flagship site, according to John Peretti, is recruiting for BuzzFeed News editors and writers for a range of jobs.
Furthermore, the corporation is cutting back on spending, employment, and other non-essential expenditures.
“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 believes he could have managed the change better.
He was also hesitant to recognize that large platforms could not provide the necessary distribution or financial backing for high-quality, free social media content.
In addition, BuzzFeed’s CEO announced the resignations of sales head Edgar Hernandez and operations leader Christian Baesler.
In December 2022, BuzzFeed lay off around 180 people, or 12% of their workforce.
In response to BuzzFeed’s acquisition of Complex Networks, the layoffs were announced.
In 2022, BuzzFeed will likewise reduce its presence in New York.
It also closed three of its four outlets in Los Angeles.
BuzzFeed’s journalistic efforts were decreased to make the firm more financially sustainable, however this resulted in the departure of numerous editors.
The company went public in 2022 through a special purpose acquisition vehicle, with shares plummeting more than 40% in the first week of trading.
According to one investor, shutting the newsroom might increase the stock’s worth by $300 million.
Furthermore, John Peretti stated that the corporation wants to lay off employees in several other nations.