BuzzFeed to lay off 15% of staff and shut its news unit

Terminations, which will be completed by end of the second quarter, will affect company’s content, administration, business and technology teams

Jonah Peretti, founder and chief executive of BuzzFeed. Getty

Online media outlet BuzzFeed is laying off 15 per cent of its staff members and shutting down its news unit as part of efforts to reduce spending and save capital, the company’s chief executive Jonah Peretti said in an email sent to staff on Thursday.

The terminations will affect about 180 employees across the company’s content, administration, business, and technology teams.

This is the second round of layoffs within five months — in December, the company had announced plans to cut its workforce by about 12 per cent.

“The reduction in workforce plan is part of a broader strategic reprioritisation across the company in order to accelerate revenue growth and improve upon profitability and cash flow,” BuzzFeed said in a regulatory filing to the US Securities and Exchange Commission.

The company expects to complete the reduction in its workforce by the end of the second quarter of its 2023 financial year.

Founded in 2006, New York-headquartered BuzzFeed is a media, news and entertainment company with a focus on digital media.

“The changes the business organisation is making today are focused on reducing layers in their organisation, increasing speed and effectiveness of pitches, streamlining our product mix, doubling down on creators, and beginning to bring AI [artificial intelligence] enhancements to every aspect of our sales process,” Mr Peretti told employees in a memo seen by The National.

“We have determined that the company can no longer continue to fund BuzzFeed News as a stand-alone organisation.”

As part of the latest changes, the company also announced the exit of its chief revenue officer Edgar Hernandez and chief operating officer Christian Baesler.

Following the announcement, the shares of BuzzFeed were down nearly 23 per cent to trade at $0.72 a share. It has dropped more than 85 per cent in the past year.

The company’s news unit is part of BuzzFeed’s content division. It had about 100 employees and lost about $10 million a year, people familiar with the matter told CNBC last year.

“We have 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,” Mr Peretti said.

“Dealing with all of these obstacles at once is part of why we have needed to make the difficult decisions to eliminate more jobs and reduce spending.”

After boosting hiring during the digital boom at the height of the Covid-19 pandemic, technology companies have been laying off workers amid declining earnings and growing fears of a recession in the US.

Microsoft, Alphabet, Facebook’s parent company Meta, Yahoo, Zoom and Spotify are among the companies that have cut thousands of jobs in recent months.

US employers announced 77,770 job cuts in February, a fivefold increase on an annual basis, Chicago employment company Challenger, Gray & Christmas said.

In the first two months of this year, employers announced plans to cut 180,713 jobs, the highest January-February total since 2009, the report said.

Technology companies cut the most jobs in February at 21,387, accounting for 28 per cent of total layoffs.

The industry slashed 63,216 jobs in the first two months of 2023, compared with 187 cuts announced in the same period last year, the report added.