Apr 20, 2023 - Economy

BuzzFeed News to shut down, as CEO cites missteps

BuzzFeed CEO Jonah Peretti. Photo: Patrick T. Fallon/Bloomberg via Getty Images

BuzzFeed is shutting down its BuzzFeed News division as part of wider effort to turn the struggling media group around and to squeeze profits from a company that's lost 90% of its value since it listed in 2021.

Why it matters: The move underscores the broader pressure facing the digital media industry and puts a spotlight on a company that failed to move quickly to address ways to boost revenues and manage expenses.

Of note: BuzzFeed News won multiple awards including a Pulitzer Prize. Journalists inside and outside the organization publicly expressed sadness that the respected news outlet was finished.

Details: In a memo to staff, CEO Jonah Peretti took a large part of the blame for the news division's downfall, writing that he over-invested in the business and relied too much on social media distribution.

  • He pointed to other areas that he and his team mismanaged, "in particular, the integration process of BuzzFeed and Complex, and the unification of our two business organizations, should have been executed faster and better."
  • Peretti said that BuzzFeed, the parent company of media outlets BuzzFeed News, HuffPost, Complex and Tasty, would cut its workforce by 15%. BuzzFeed News would begin its shutdown on Thursday, he said.
  • BuzzFeed News has about 60 staffers, according to a source close to the matter. BuzzFeed and HuffPost will offer roles to some impacted BuzzFeed News staffers.
  • Peretti added: "Moving forward, we will have a single news brand in HuffPost, which is profitable, with a loyal direct front page audience."
  • The overall company cuts will affect around 180 people, including chief revenue officer Edgar Hernandez and chief operating officer Christian Baesler. BuzzFeed president Marcela Martin will take over revenue duties.

The big picture: Once a digital media darling, BuzzFeed has become a cautionary tale for its peers, largely for its decision to go public via a SPAC in 2021. When it listed, the company was worth more than $700 million.

  • Simultaneous with that listing, BuzzFeed announced it acquired entertainment company Complex Networks.
  • The stock fell 20% to 71 cents per share on Thursday. Its current market value is around $100 million.
  • Thursday's layoffs are the latest in a string of mass job cuts across media over the past year, including multiple rounds of cuts at BuzzFeed. It offered voluntary buyouts to about one-third of the 100 news division employees last year.
  • Digital media publication Insider announced layoffs of 10% of its staff earlier on Thursday, according to a memo obtained by Axios.

What they're saying: Former and current BuzzFeed staffers lamented the loss of BuzzFeed News on Twitter.

  • "BuzzFeed News deserved so much better, and has for a long time," tweeted Tom Namako, former deputy editor-in-chief at BuzzFeed News who left last year to join NBC News.
  • "BuzzFeed News funneled venture capital into something genuinely very useful and necessary: High-quality reporting freely available for anyone to read. It was the envy of every reporter who entered journalism in the chaotic 2010s and didn't work there. What a loss," tweeted HuffPost senior reporter Alexander Kaufman.

The bottom line: The digital media era that BuzzFeed was the poster child for is long over.

Editor's note: This story has been updated to add more details.

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