BuzzFeed Slumps 20% After Shutting Down News Division
BuzzFeed, Inc. (Nasdaq: BZFD) is closing its news division and laying off 15% of its employees. The company announced the news in an email to employees on Thursday from CEO Jonah Peretti, who stated that the layoffs will affect about 180 workers.
“While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization,” he wrote.
Some employees from the defunct News division will be transferred to the HuffPost brand, which the business bought in 2020.
“I made the decision to overinvest in BuzzFeed News because I love their work and mission so much,” Peretti told staff. “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.”
Following the news, the firm’s shares fell nearly 20% on the day. Year-on-year, the company has lost more than 85% of its market cap.
The fresh job cuts is the company’s second round of layoffs since December, when it lost 12% of its workforce.
Around 1.7% of BuzzFeed News’s workforce was let go in March following the company’s first earnings report since going public in December. HuffPost, meanwhile, lost 47 staffers in the US and its entire operation in Canada in March 2021 — less than a month after being acquired by the company from Verizon Media.
On the same day the firm announced its earnings, the media outfit’s editor-in-chief and two other segment editors announced they are leaving the firm.
Peretti’s email to staff says the company has “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.”
“Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending. But I also want to be clear: I could have managed these changes better as the CEO of this company and our leadership team could have performed better despite these circumstances. Our job is to adapt, change, improve, and perform despite the challenges in the world. We can and will do better,” Peretti added.
As part of the restructure, the company announced the departures of chief revenue officer Edgar Hernandez and chief operational officer Christian Baesler. President Marcela Martin will take over all revenue functions immediately.
Replaced by AI?
BuzzFeed announced to staff this week that it plans to use artificial intelligence to customize and improve its online quizzes and content.
For its content, the firm will leverage technology from the artificial intelligence company OpenAI. The company is also behind ChatGPT, a language model chatbot that was released in November 2022 and quickly garnered popularity due to its ability to mimic human dialogue.
“In 2023, you’ll see AI inspired content move from an R&D stage to part of our core business, enhancing the quiz experience, informing our brainstorming, and personalizing our content for our audience,” Peretti said.
Although the company has lately begun employing AI technology to create some of its popular online quizzes and lists, Peretti claims that none of the jobs lost on Thursday will be replaced by AI.
BuzzFeed last traded at $0.75 on the Nasdaq.
Information for this briefing was found via NBC, CBC, The Guardian, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
