BuzzFeed shares dropped more than 20% after CEO Jonah Peretti said the company is shutting down its news division as part of a 15% workforce reduction affecting 180 jobs.
- Buzzfeed News is shutting down in an effort to cut costs.
- BuzzFeed shares fell 20% after the announcement.
- CEO Peretti says the changes and improvements they are making "are necessary steps to building a better future.”
More than a dozen of those affected by the move will be offered jobs at BuzzFeed.com and HuffPost, which was acquired by BuzzFeed in 2021. The News Guild union will be consulted about the cost reduction plans and what they mean for affected members, Peretti said.
BuzzFeed News Not Profitable
According to an anonymous BuzzFeed staff member who spoke to the New York Times, Peretti told employees that he had failed them. The move is intended to cut costs, and Peretti said he feels he over-invested in BuzzFeed News due to his love for its work and mission.
"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," Peretti said, adding that these changes "are necessary steps to building a better future."
Buzzfeed News, which won a Pulitzer Prize in 2021 for its series exposing China’s mass detention of Muslims and a 2017 nomination for an exposé into a corporate dispute-settlement process, wasn't profitable.
Instead of a standalone platform, BuzzFeed will publish news on HuffPost, which Peretti said is profitable without so much reliance on social platforms. Going forward, the company will focus on parts of the business that add to the company's profit margin. BuzzFeed plans to archive all stories published by its news division on its website in perpetuity, according to a spokesperson.
As a result of a slowing economy, the rapid growth tech companies experienced following the pandemic has begun to fade. BuzzFeed is only one of a string of digital media companies downsizing, including ESPN, Spotify, Yahoo, and Vimeo.
BuzzFeed went public via a merger with a special purpose acquisition company (SPAC) in December 2021 and its shares have lost more than 91% of their value since then.