In addition to closing the news unit and laying off employees, BuzzFeed has also announced that two of its executives are stepping down. Its chief revenue officer Edgar Hernandez and chief operating officer Christian Baesler are leaving the company.
BuzzFeed Inc (NASDAQ: BZFD), an American entertainment company that focuses on digital media, has announced a decision to close its news division within the cost-cutting strategy. As BuzzFeed founder and CEO Jonah Peretti has explained, the company “can no longer continue to fund BuzzFeed News” and is planning to make substantial redundancies across the company. The decision has affected as much as 15% of BuzzFeed staff, or about 180 employees, who lost their jobs.
Notably, this is the second time BuzzFeed is downsizing its workforce. In December 2022, the company reduced its headcount by 12%. Before the end of the second quarter this year, BuzzFeed is planning to conduct another round of layoffs and complete the staff reduction.
The reason for such drastic measures is the challenging environment and the necessity to accelerate revenue growth and improve profitability and cash flow. Back in 2020, BuzzFeed rocketed due to the digital boom that resulted from the Covid-19 spread. Now, a troubled stock market listing, a tough economy, a declining stock market, a slowdown in digital advertising, and changing audience habits are the key factors that pushed BuzzFeed CEO to make such a decision.
Jonah Peretti stated:
“I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. 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-built for social media.”
In addition to closing the news unit and laying off employees, BuzzFeed has also announced that two of its executives are stepping down. Its chief revenue officer Edgar Hernandez and chief operating officer Christian Baesler are leaving the company. BuzzFeed President Marcela Martin will now be in charge of all revenue functions.
Following BuzzFeed’s announcement, its stock dropped by 19.71% to close at $0.75 per share on Thursday.
About BuzzFeed
Founded in 2006, BuzzFeed is a digital media company that provides news and entertainment content. The company’s platform includes a website and mobile app, social media, YouTube, and other digital platforms that allow social distribution of entertainment and trending news content to engage consumers in real-time. In the 2010s, when social networks such as Facebook and Twitter were booming, BuzzFeed managed to raise a fortune from investors. However, the company has failed to continue making money as a result of financial challenges.
Back in 2014, The Walt Disney Company (NYSE: DIS) was considering buying BuzzFeed, but the deal was not completed.
In 2020, BuzzFeed acquired HuffPost from Verizon Media as the two parties decided to leverage each other’s market strengths and create new revenue opportunities.
At the beginning of 2023, BuzzFeed said it would start using OpenAI, the American artificial intelligence (AI) research laboratory behind the popular ChatGPT platform, and leverage artificial intelligence to create content for its audience. Now, BuzzFeed will continue to publish news on HuffPost only.
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