The digital news and entertainment powerhouse BuzzFeed announced on Tuesday that it would make painful employee reductions, laying off about 12% of its workforce in the midst of a deteriorating economic environment.
The company’s founder and CEO, Jonah Peretti, attributed the layoffs to “a mix of worsening macroeconomic conditions” and changes in how consumers consume information in a letter to affected staff.
The company’s stock is currently trading at an all-time low of roughly $1.10 per share, down over 90% over the previous year, which coincides with the decision to reduce operating costs.
A spokeswoman for the company told CNN that the layoffs, which are anticipated to affect 180 workers, were made to the sales, technical, production, and content teams for both BuzzFeed and Complex, which it purchased last year.
The representative further stated that no budget cuts were made to BuzzFeed News, HuffPost, or its Tasty food brand.
Numerous media organizations have cut expenses in recent months as the advertising market deteriorates and the prognosis for the economy darkens.
In the past few weeks alone, CNN has let go of hundreds of workers; newspaper chain Gannett has let go of about 200; AMC Networks has cut 20% of its workforce; NPR has said it needs to cut $10 million in costs; Disney has announced a business restructuring; Paramount Global has let go of some workers; digital news start-up The Recount has reportedly made plans to close; and The Washington Post has terminated the print version of its Sunday magazine, which has led to the layoff of 10 employees.
The good work the impacted employees had done over the years to develop our company and our brands was not reflected in the layoffs, Peretti assured his colleagues.
Peretti stated that in order for BuzzFeed to survive the economic slump, which she predicted would last until at least 2023, “we must adapt, invest in our strategy to best serve our audience, and alter our cost structure.”
Peretti stated that going forward, he intends to make investments “in areas that would drive development” and create “a more strong creative business.”
Peretti informed the impacted employees, “I know that there’s nothing I can write here to make this easy for anyone losing their job today.” “That’s no consolation if you are directly impacted, even while I believe in the approach we’re following and realize it’s vital to handle the challenging year ahead.”
How BuzzFeed Works
An international media organization called BuzzFeed produces information on a wide range of subjects, including animals, politics, sports, fashion, and business.There are many different channels and formats used to convey content. BuzzFeed makes use of all forms of contemporary media, including:
Written content
Videos
Audio
their infamous quizzes, even. Their own website, social networking sites like Facebook, Instagram, or Snapchat, YouTube videos, and podcasts on services like Apple or Spotify are some examples of media channels.
The company’s emphasis on producing viral material and enabling others to spread it throughout their networks of friends and family accounts for part of its appeal. The quizzes on BuzzFeed are one of the most notable instances of this strategy.
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A Short History Of BuzzFeed
Jonah Peretti created BuzzFeed in 2006. (CEO). Before founding BuzzFeed, Peretti was Eyebeam’s temporary director of research and development while still finishing his master’s degree at MIT in Boston.
Nearing the end of his MIT studies in 2001, Peretti could already see himself putting things off.
During a live recording of Guy Raz’s podcast “How I Built This,” Peretti recalled hearing that “Nike had introduced a service where you could customize your shoes, which was a fresh interesting thing.”
Peretti eventually discovered a print he liked after exploring the service: a sweatshop. Unfortunately, this didn’t sit well with Nike, and after several emails back and forth, the order was rejected. Peretti put the letter in order and forwarded it to a few acquaintances. He was unaware that his invention was passed on to several people and eventually reached millions of people.
He even appeared on NBC’s Today Show to discuss sweatshop labor with Katie Couric, the host, and the head of worldwide PR for Nike. He started to ponder:
“How can a student who has no background in the media speak to millions of people on a topic he barely understands?”
This incident gave him his first taste of making viral material and introduced him to Arianna Huffington and Ken Lerer, with whom he established HuffPost in 2005.
Peretti launched a side project called BuzzFeed soon after launching HuffPost, which was later acquired by AOL for $315 million in 2011.
The business remained a part of the Huffington Post network up until 2008. However, the company’s rapid expansion forced Peretti to devote all of his attention to it.
Due to its emphasis on viral content and meticulous measurement, the company has amassed millions of monthly visitors by 2008. Early on, the design and product teams at BuzzFeed used data science to forecast which articles would go viral while continuously improving the user experience on the website.
Additionally, the business was in a position to profit quickly from significant technological advances. For instance, BuzzFeed was among the first media outlets to publish material on Facebook and Snapchat, which gave them time to experiment and cultivate a following of devoted fans.
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Over 1,100 employees are currently employed by the company, which has 14 offices throughout the world, including New York, Los Angeles, Chicago, Paris, Sydney, and So Paolo. Additionally, every month more than 160 million people visit the BuzzFeed website.
However, despite the company’s tremendous development, there have been some setbacks. Under mounting pressure from current investors, the corporation had to let go of 15% of its global personnel in 2019 in order to achieve profitability.
